The new Open Money exchange system: Michael Linton, founder of LETSystems

This is Part 2 of a conversation with Michael Linton – founder of LETS, the moneyless exchange system. In Part 1 we talked about LETSystems and why it didn’t grow in the way Michael would have liked, and in Part 2 we’re going to talk about his new idea – Open Money.

What’s the problem you’re trying to solve? What’s your motivation?

I don’t see any justification for financial poverty. I think the concept of poverty is a monetary instrument. It’s obscene. It’s patronising, it’s a power structure, zero-sum, top-down game. It’s the way the world has been financially governed, as a fear-driven colonialism since the 1300s. Progressively as coinage, tally sticks, kings, taxes – it became a weaponised, transactional system that’s designed to extract. The common community had its own energy and vitality – the sort of thing that David Graeber talked about – production, annual cycles, harvests, life and death. Then when the coinage / tally sticks came in, it was to extract and control. We’ve been there now for over 500 years, aggravated by Isaac Newton, who came up with a coin that actually made the London banking system work, which made it the dominant banking system, which created the British merchant navy, which built an empire and colonies. The whole thing came from coinage.

Now we’ve got derivatives gone mad. No-one knows what’s going on, but it’s coming down. There needs to be co-operation at a local level. I don’t just mean in my town – it needs to be everywhere. Why are we getting into contentious competition in our physical localities? We’re all in the same canoe. Stabbing each other in the back for money isn’t a good idea. So networking inside the neighbourhood, the community, the region – rather than compete for money, is what we need to do. With conventional money, we’re both afraid. I’m afraid that I’m spending too much, you’re afraid that I’m not spending enough. Everyone’s afraid that their business is going to go under. Everyone’s afraid they’re not going to get enough money.

The exchange medium doesn’t have to be scarce does it – any more than inches need to be scarce? But before we go into the details of Open Money, how does what you’re doing with Open Money solve this problem of poverty and extraction and wealth concentration?

It adds freedom – if one can say no. The compulsion of conventional money is scarcity and command. The babysitter doesn’t get the same as the orthodontist. Why not? Because money is scarce and there’s a competition for it, and an orthodontist has more weaponry than a babysitter. With scarcity, you’ve got to have a gradient, competition, a fight. Money creates a lot of fighting.

But you could still do that in any exchange system.

Not for long. It’s called entropy. Don’t shit in your own back yard.

What’s the incentive for people to study for years without money, to gain skills?

Autonomy, mastery and purpose (Daniel Pink). That’s what drives people. You have to enable those to take form and shape and function. That includes the business plan. The business plan for complementary currencies is often ‘we’re helpless and poor – give us a grant’. There’s a determination to prove how helpless and poor they are.

So with Open Money, we can just issue our own money, rather than rely on banks?

We ‘are’ our own money in the same way that we ‘are’ free speech. Do we have free speech because someone else says we do, or because we say we do?

If we’re ‘allowed’ free speech, it’s not really free is it?

Same thing here. Of course we can have our money. We ‘are’ our money. Be your own money. We’re all in this hum of activity. Doing our own business is the answer.

So nuts & bolts: if someone is persuaded that you’re talking sense – what do they do? How does it work?

First get a name in your locality. This is so much about reputation, locality and presence. First of all, geographically – whether it’s a street, a borough or a city. First there are registries of individuals in geographical locations. Those are anchor identities. Then you can be party to any currencies that are circulating in your area that seem relevant to you.

Where do those currencies come from? How do they get started?

For example, a group of people could come together and decide to start a ‘Tooting South currency’ – there are enough businesses and institutions there to form a currency for that location.

Coincidentally, I live in Tooting South. So I’d be a member of the Tooting South currency. I guess it’s the same as your ideas on LETSystems, with no credit limits, or democratic governance?

Not usually, although there will be some, that start ‘within a box’. For example a church could say ‘you have to be in our church to use the church money’. The Chamber of Commerce could say ‘unless you have a business licence within this borough or catchment area, then join another currency or get a business licence’.

So the Open Money idea isn’t about groups or clubs – it’s about currencies. And you can decide to use any currency you like?

It’s a multicoloured palette. What colour do you want to use? There are no limitations. There might be 3 or 4 Tooting currencies, for example.

Say if I were a shopkeeper in Tooting, and I used a Tooting currency, and someone comes into my shop who doesn’t use a Tooting currency, but maybe they use a Brixton currency – how do they buy something in my shop?

Well, they’d use a wider currency.

So they could use a London currency, or a South-East England currency?

Sure.

Won’t it become confusing for people with so many currencies?

It’s not hard. There will be ways. Our anxiety about money is that it gets away from us – will we have enough? This won’t be the same in the new system – it will be exactly the opposite. ‘Our’ money is like being surrounded by nice, comfortable balloons, cushioning us and helping us float. It helps me to be myself in the world.

If you’re buying something in a shop, you want it to be as fast and easy as giving the shopkeeper some cash, or tapping a card. what will this entail?

Some form of identification, which might be a QR code. That’s the most likely.

So your message is ‘don’t worry about it – it will all happen, and it will be easy’?

Yes, much easier than now.

I know you have 2 associated ideas for building community – called Community Way and Covestment. I find very interesting, because it’s a way of helping start new, local businesses and to help local good causes. Could you say a bit more about them?

If we want this to become substantial, we have to look at how this connects on the street, in the real world – become embedded and viable. Covestment and Community Way can be seen as ‘crowd-changing’. It’s the process whereby you capture conventional money which would normally be leaving the community. Doesn’t matter if you’re buying groceries, petrol, shoes – the money usually leaves town after being spent once. Here’s an opportunity to keep the money in the community. It can be directed to something good in the community – a permanent, substantial thing, whether it’s a roof on the church, or an MRI in the hospital, the river cleaned up – whatever.

How do we know we want it? Because some businesses over here have said that they’re prepared to put some community currency towards it. So this project has 50,000 community pounds in it, supported by this group of businesses. If you as the customer are able to spend (conventional) cash with a good project of your choice, you get the same amount of community pounds in your account. So in effect, you didn’t spend money, you changed money. Your cash goes to the good guys, you get community money, which brings you into a loyalty loop with the participating businesses in your town.

So you’re bringing resources from the cash economy into the new economy?

A business has no significant moral standing, so asking a business to give a promise in a community is a bit risky in this economy.

I read a really good paper on Covestment…

By Jordan Bober?

Yes (here’s a link)

The point is, to get a business genuinely engaged in community, they must give service first, to a third party – a good cause in the community. First of all, they must show that they’re acting in good faith. It needs to serve the community first – the fire dept, the hospital, old people’s home. This is taking what is now a throughflow of money and turning it into a ‘swirl’ (of money, around the economy). You’re capturing the energy, not just of this or that £1000, say, but from the fact that this £1000 keeps circulating.

What’s the plan, the big ambition? What’s the ideal scenario, the most it could achieve?

The end point is an ‘S’ curve. The end point is at the top – the end of poverty world-wide.

So quite big ambition?

Not ambition – that’s like saying Newton had an ambition for the apple to fall. It wasn’t Newton’s ambition, and it’s not ambition to say that the end of poverty is possible within a timespan that for most of us is inconceivable. It could become an adopted and adapted protocol that could end poverty very quickly.

What might be the biggest barrier?

It’s between the ears – always between the ears. The biggest barrier is that we’re idiots.

You and me specifically or the whole of humanity?

You’re an idiot, I’m an idiot, we’re all idiots. The word idiot is from the original greek ‘id’ – identity. So we are identities. People make their judgements, and people are ‘bubble-wrapped’. The question is, is our idiocy mutually supportive or mutually damaging? Generally, idiot behaviour is detrimental – we end up fighting each other. We are stupefied (to be stupid is to be stupefied – to be preoccupied with something that holds you installed; it doesn’t mean lack of intelligence) – so that we’re preoccupied, too busy with things to see anything else.

Most people won’t take the time to have philosophical conversations about things.

Not a chance.

But if they’re shown something that’s beneficial to them, they’ll use it and if it works, they’ll tell other people about it. I think that’s how ideas will spread – not by having philosophical discussions about them.

You change the parameters in such a way that it normalises people’s inversion into the other.

Before you know it, you’re operating in a completely different world.

So my point would be that at some point we’re going to S-curve through this. I see this window of time as something in the order of three months.

From when?

That is the other question. When do we get the lift? Until we get that, we don’t get saturation. The lift-off is likely a movie project. That’s what we’re thinking at this point. A business model for movies. The biggest problem is not the script, actors or crew – it’s the money. Who’s going to pay for it? So a lot of movies don’t get made because there’s no money. We’re looking at the crowd-changing, covestment model becoming transformational in the economy, so that a component of that can be allocated as a priority to making a movie about how we are doing it.

So are you doing it already? Are there currencies that people could use now?

In terms of actual activity, we’re about to open a college – a MOOC equivalent, but a very different one – participative and real time.

What can people do right now? Do they have to wait for the movie and the MOOC? How can they get involved?

Crowdchange.me. That’s the likely launch point. It’s not quite ready yet. It will provide more information – about how to get involved, how to get some purpose. If you’ve got purpose, that will be expressed by a time engagement. If people want to get involved at the propagation level, we need people to understand how it will be implemented. Pretty soon people will be able to put 3 or 4 hours per week into it. If they can’t do that, they probably haven’t got the point. And if they don’t graduate to 3 or 4 hours per day, they’re probably missing it too. If they get past that, they’ll be on track.

There are lots of other new currencies, lots of ‘new money’ activity around the world. Do you think they’ll be able to be knitted together, or do you think one will emerge victorious?

There is no ‘one’. There are, however, protocols, which for better or for worse, match territory. The territory is a complex interaction, multilayered and multifaceted. It has this eddying, swirling quality to it. It’s like a biophysical world. It doesn’t have edges in the same way a legal document has edges.

I’m interested in any ideas that help build the new economy.

Go to the root. To the point where the energy is. Don’t look at it as a technical or an organisational thing. Look at how the life force is reflected in how these things work with each other. With that perspective, I think you’ll find the space is much clearer, and you won’t be distracted by things like more tokens. Tokens are shiny attractors – ‘look at me!’ – it’s a complicated, speculative world. I would say that isn’t going to persist if there’s a comparable simplicity, easily propagated, works with QR codes, basically cost-free, doesn’t require external injections.

The time is now – the real economic hardships of the Covid lockdowns haven’t kicked in yet. Any kind of alternative, I think people will give them a good look. I think it’s going to be interesting.

I hope so. Our proposition is that it will be interesting, entertaining, and you won’t get the finished package at any one time. Open Money is an open book, an open game. All sorts of people are probably going to be a big part of it, even if they don’t know it yet. Don’t expect anything predictable.

Where can people keep up to speed with what you’re up to – latest developments?

Openmoney.cc will be the rigorous end of the process – you’ll find the documentation, the software. It’s not up yet – probably in a few days. We’re in the process of uploading the links to the repository etc. The wild end is crowdchange.me.

It’s been great talking with you.

It’s been very good Dave, and thank you for your attention and the time you’ve put into this process over the last several months.

Highlights

1. Stabbing each other in the back for money isn’t a good idea. So networking inside the neighbourhood, the community, the region – rather than compete for money, is what we need to do.
2. We ‘are’ our own money in the same way that we ‘are’ free speech. Do we have free speech because someone else says we do, or because we say we do?
3. It’s a multicoloured palette. What colour do you want to use? There are no limitations. There might be 3 or 4 Tooting currencies, for example.

NB: There’s a book on the way about building a new economy around a mutual credit core.