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By Tim Jenkin

Imagine if money-as-we-know-it had never been invented. It seems like an impossible idea, but imagine if gold had been an extremely rare substance on earth and thus the idea of using it as an exchange medium had never caught on, and no other substance on earth had become the unquestioned medium that everyone would accept in exchange for the products of their labor. Perhaps people would have bartered things in the beginning and certain commodities would have become ‘money’ in the sense that most people would accept them in exchange even if they had no direct use for them. But as trade expanded and commerce became more complex, instead of there developing a universally acceptable exchange commodity such as gold, people just granted each other credit and kept a record of it. In other words, instead of swapping commodities to get what they wanted, people just kept a record of what they delivered to others, and those who received the goods kept a record of what they owed.

Well, this is not such a extraordinary idea. In fact it is an idea that is as old as the hills and was probably in use long before the invention of ‘money’. Barter was never a very good idea because it seldom happened that there was a coincidence of wants between traders. Those wanting to sell but who couldn’t find buyers offering what they wanted, could either accept something else that they knew they could swap for something they wanted from other sellers, or they could grant ‘credit’ to their buyers. That is, they would give the buyer what they had for sale and simply keep a record of it. The record would constitute the note of credit, which represented what the buyer owed the seller. The seller could either wait until the buyer had something with which to settle the debt (such as food at harvest time), or the seller could trade the debt.

This means the creditor (A) of the buyer (B) could receive something from another seller (C) and ‘pay’ for it by transferring B’s debt to C. B could then deliver some goods or service to C and this would settle B’s debt to A. For this to happen on a larger scale there would have to be a system of recording these credits and debt transfers.

The ancient Egyptians had a money system a bit like this. Farmers would bring grain or other produce to a central warehouse and be given a receipt for what they had delivered. These warehouse receipts (notes of credit) served as money and could be traded for goods and services. The receipts could ultimately be redeemed for produce from the warehouse.

The ancient Incas had no coins or anything else normally associated with money, yet theirs was a complex society and great public works were carried out. How did they manage it without money? It seems that they had some kind of centralised accounting system that recorded what citizens contributed to the common wealth and what they could take from the social product. Despite having no writing system they had a highly developed information and accounting system using knotted cords called Quipus. It was a decimal-based system used to record huge amounts of information for the Inca state, which extended over vast areas of South America.

Let’s get back to our imaginary society where there is no tangible money, only the recording of credits and debt transfers. How would such a society organise its economic affairs without money? How would homes get built, how would roads get built, how would health institutions get built? What would keep people active without receiving anything tangible that they could use to acquire their needs?

Let’s answer these questions by taking a simple example of a school that wants to build a new school hall. What would happen under the current money system? The school would first of all get a quote from a builder or architect indicating how much the desired hall would cost. Then the school would organise fund-raising events such as fetes, raffles, cake sales and generally cajole parents into contributing additional money over and above their fees. Eventually the money would be raised and the hall would be built.

It seems absolutely normal that if something like this is wanted then the money should be raised first. That way there can be certainty that the builders will be paid when the job is done and the school won’t be left in a position of debt.

But what is really happening here? Why should a school have to go to all the bother of organising markets and events to raise money. That is not the job of schools, nor of parents. It also requires a lot of effort and the expenditure of energy to raise the money. What is wanted here is not money but a school hall.

Why should the school board not call in a builder and architect and ask what is required: how many bricks, how much cement, how much wood, how many doors, how many windows, how many people to assist in the construction and so on. After the requirements have been determined the builder would go to the community and obtain what is required. At each stage a record would be kept of what was acquired from others. The materials would be brought to the site and the building would commence. Those assisting would not be paid with little packets of money each week; instead a record would be kept of the hours they spent on the site and this would determine what they could claim from the community in terms of goods and services.

What has happened here is that the school has received credit from everyone who has contributed to the building of the hall. The school is now in debit to the community and needs to give back to the community services to the value of the school hall. The school hall itself could become the means by which the school reduces its debit. By renting out the space and facilities it could in time clear its debit. The debit could also slowly be cleared by temporarily raising fees or simply from the existing fees.

The important decision the school would have to make before deciding to build the hall is whether it would be able and how long it would take to eliminate its debit to the community. If the period of debit elimination was too long it would have to opt for a lesser hall.

This simple example demonstrates how things can get done without money-as-we-know-it. This does not mean that ‘money’ is not involved, but it is a completely different concept of money. It is the kind of money that we have in the Talent Exchange. We don’t have a supply of cash so nothing can ever be paid up-front. And because the seller credits him/herself it is impossible for suppliers to be left in a situation where they are not rewarded for their efforts.

It is possible to accumulate Talents in order to acquire ‘big ticket’ items without incurring a debit, but there is no real need for this as it is possible to obtain credit from the community without any additional expenditure (interest). In other words, there is no price attached to credit and it is freely available. The Talent Exchange does not currently have any mechanisms to control the taking of credit. If the Talent economy were to grow to a scale where people were building school halls and houses there would have to be some mechanism to control the taking of credit. Buyers (takers of credit) would have to demonstrate that they were in a position to reduce their debits within a certain period of time. This would be a bit like taking out a bond with a bank, which is a promise to reduce your debit by regular amounts over a fixed period of time. The difference in the Talent economy is that you would not pay for that hall or house three or four times over through usurious interest payments.

As the Incas showed, and the Talent Exchange is beginning to show, it is possible to organize our economic affairs without a tangible, supplied, countable, limited, existential money. Money is that which organizes our relationships in the economic domain. This can be done much, much more efficiently using computers and keeping a record of who does what for whom than by having a kludgy supply of ‘stuff’ that we exchange with each other in order to obtain the goods and services that we need and want. The idea that one thing has to exchanged for another is prehistoric. It is time to move into the 21st century and take advantage of computers to do what has never been possible until now. By eliminating money-as-we-know-it we will eliminate most of the social, economic, political and environmental problems that currently beset us.

www.StLouisHomesByGina.com The Gina Koerner Team