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Wealth in a Nutshell

Wealth is access to well-being. There are at least three levels of wealth:

  1. Tradable Wealth: Food, shelter, services, time, are all forms of tradable wealth. We are all familiar with tradable wealth--it is the stuff we need and want, the resources that we compete for. Things we can trade are the products or the components of systems.
  2. Measurable Wealth: My health is non-tradable--I can't give it to you. I can give you my blood, which may affect both of our health, but I can't give you my health itself. It is a property of my body as a whole. However, you can measure my health in lots of objective ways: the miles I run or the number of times I see a doctor. Another thing that is non-tradable is the productive capacity of a factory. I can sell you the products of the factory, or the factory itself, but not its productive capacity. But you can measure its productivity by comparing its output to the inputs it requires. Similarly the health of a forest is non-tradable. Its diversity, resilience, etc. can, as with bodily health and productive capacity, be affected and objectively measured, but it can't be traded. Bodies, factories, and forests are all examples of systems. Things we can measure but not trade are properties of systems as a whole.
  3. Acknowledgeable Wealth: Friendship, beauty, freedom, civility, culture, happiness, integrity, reputation--these are all forms of acknowledgeable wealth. They are neither tradable nor objectively measurable because their impact is only felt subjectively. I can have friendships of different strengths--from an acquaintance to a best buddy--and though I can tell the qualitative difference between them, that difference is not measurable using any external scale. Rather, it is a difference in quality of relationship between one system (me) and two other systems (my acquaintance, and my buddy). Similarly my professional reputation comes from my relationships with my previous clients. As a potential client you can get a subjective sense of my reputation by talking to my previous clients, but there is no one objective standard to go by in making your choice. Those things that we can acknowledge but cannot measure or trade are inter-systemic resonances.

These levels of wealth are interdependent. Many communities are resource-poor but health- and culture-rich, but this is only possible up to a point: at some point lack of resources will degrade health and culture. Communities that are resource-rich but don't maintain their other levels of wealth will eventually degrade their capacity to maintain their tradable wealth.

Wealth Acknowledgment

When I barter a dozen of my eggs for a pound of your carrots, wealth acknowledgment happens in the act of haggling: It's where we determined how many eggs for how many carrots. When I pay you a coin for your carrots instead (because you don't want my eggs), the coin itself is the acknowledgment of the wealth transfer. The advantage is that the wealth-acknowledgment token, the coin, is redeemable elsewhere in the community. And when communities start using paper notes as wealth-acknowledgment tokens instead of precious metal, the number of transactions is no longer limited by the amount of metal available. When communities invent wealth-acknowledgment tokens for investment, like stock certificates sold by entrepreneurs, they further unlock the potential for growth of wealth.

These examples show how the evolution of wealth-acknowledgment systems prepares the ground for the growth of wealth. They also show how wealth-acknowledgment systems are adopted by communities to reduce their risk in making transactions. Bartering is not risky because the wealth is immediately exchanged, but what if I don't need your carrots? Accepting a token allows me to give without immediately getting wealth in return, because I know I can use the token to get wealth later. Stocks and bonds work similarly in higher-risk situations. Thus wealth-acknowledgment systems evolve in a feedback spiral with social cohesion and trust. They require some level of trust and cohesion to function, but they generate much greater cohesion and trust, which allows new wealth-acknowledgment systems, and the loop continues.

Grant-making, endowments, charitable trusts, and donations (what we call philanthropy), are all efforts to increase measurable or acknowledgeable wealth. Organizations that seek to increase measurable and acknowledgeable wealth in communities almost always suffer from the lack of money. To increase our ability to cultivate these levels of wealth, we need a wealth-acknowledgment system that moves beyond money.

Why do we need open money?

  1. Modern money is inefficient and unfair. Because communities cannot create their own currencies they are beholden to, and fundamentally controlled by, whoever does, just as users of coins were limited by the amount of precious metal available. When communities can create their own currencies, they don't have to export their own wealth to get money to use for trade. They can start trading right away and export later if they so choose.
  2. "Money can't buy me love." The structure of the modern monetary system is based on assumptions of competition & resource scarcity. Though these assumptions can be applied to tradable wealth, they blind us when we apply them to only measurable or acknowledgeable wealth. To cultivate the kinds of wealth that correspond with overall systemic health and inter-system resonances, where the assumptions of scarcity and competition no longer apply, we need a new wealth-acknowledgment system.
  3. Our culture and our planet are falling apart. Humanity has grown so large and complex that cultural systems that once maintained the health of our communities no longer can. Similarly, the effects of humanity on the planetary ecosystem are beyond the ecosystems capacity to self-repair. Humanity must take responsibility itself, but currently has no tool and no capacity sufficient to the need for collective action.

How does open money work?

You treasure what you measure, and you measure what you treasure. Open money provides the tools to implement this maxim. What should we be treasuring in our culture and on our planet that we so far have no way to measure?

Throughout history, wealth acknowledgment evolved by becoming more abstract and less substantial. Open money follows this same pattern by being a meta-currency system, not just a new single kind of money. It enables the creation of many new types of money. It puts currency creation directly in the hands of communities so that they can create wealth-acknowledgment systems for tracking all types of wealth--tradable, measurable, and acknowledgeable--and so that they can tailor the tracking to fit their precise needs.

Open money works by providing a unified platform for the interchange of all these different kinds of wealth acknowledgment, just the same way that the Internet provides a unified platform for the interchange of all kinds of information. Just as the great shift of the Internet was in not specifying what kind of data can flow across it (unlike the phone network), the great shift of open money lies in not dictating which new form of wealth-acknowledgment people should use. Instead it provides the basic building blocks for communities to create new types of wealth-acknowledgment systems themselves.

Right off the bat, communities can use open money for simple things like Local Exchange Trading Systems (LETS), Time Banks, barter networks, carbon-emissions trading programs, baby-sitting co-ops, reputation tracking systems, business loyalty programs, etc. But the interesting stuff will happen when communities apply their creativity to invent new currencies that solve wealth-acknowledgment problems we don't even have names for yet.

Further Reading

Michael Linton's writings on open money: openmoney.editme.com & openmoney.org and on LETS

Collective intelligence and money: thetransitioner.org

Community currency background reading: E. F. Schumacher Society