* Thomas Greco is encouraging small business to business mutual credit clearing as a foundation for any viable currency alternative wishing to gain significant ground in the local economy. Paper currencies and other systems can be added on later, but the bulk of our currency based trading remains business to business and business to consumer and not between individuals. And a system that desires business involvement might be wise to design a system that is easy and beneficial for small businesses to use before anything else. Also, if we can provide support to local businesses with low or no cost mutual credit and increase trading boosted by alternative currencies, we might save many local jobs, which provide real paychecks that can pay for real needs.

There are a number of platforms being developed for business to business mutual credit clearing with progressive aims, like GETS from Richard Logie in Scotland. However, like many of the other systems and like Timebanks USA, these software platforms come with an ongoing cost to provide the entrepreneurs who designed them with a substantial living. Thomas Greco’s suggestion- buy the best one out and make it open source. Not a bad idea. I’d hate to promote an alternative currency platform that you have to spend lots of national currency notes to maintain, especially when you are trying to support struggling small businesses and poor individuals that cannot afford that cost to passed on to them. That makes no sense.

* Stephen DeMeulenaere of the Complementary Currency Database pointed towards STRO’s work in Latin American, which Miguel Hirota of Complementary Currency Labs of Japan has also noted many times. It is difficult to find information on the mechanics of these programs. However, the Banco Palmas project in Brazil is an interesting success model. In a poor area of Brazil, locals are given currency by card or paper as credit to start businesses or to purchase goods either on credit alone or for work. This dramatically stimulates the local economy in an area where many people have no ability to earn national currency on a reliable basis to meet basic needs. The system works and people pay back their small loans simply because people know each other and it is tight-knit community. However, STRO has chosen to limit their assistance in designing currencies models to developing countries, primarily in Latin America.

Both official Timebanks USA and other online time exchanges are taking off. Timebanks USA claims 70+ new timebank start-ups this year in 28 states, and 188 set-up kits were sent off. These projects are simple to start and relatively low risk. However, they have a difficult time capturing a significant portion of the economy. This may change as federal currency because more scarce and people need to save their few dollars for necessities that can only be paid in federal currency like medicine, rent and insurance. When you use timebanks, you spend and earn hours for things that don’t necessarily require federal currency to flow. Though they have failed so far to capture a large portion of the local economy, their viral spread throughout the world without any concerted effort and significantly large world-wide numbers of individual participants is a testament to the desire to organize at least the informal economy in this way and to reconnect alienated communities, especially in the West.

LETS and some other kinds of time exchange and barter, like RICH Hours and Swapcove also don’t require federal currency, but encourage trading of some things that you might otherwise have to pay federal currency for because their unit of account is linked to the dollar. RICH Hours, Dibspace, LETS and local discount programs (like on Village Networks website and the Go Local Sonoma card) are linked to the US dollar so they are easier for businesses to adapt to and feel confidence in. It appears the more like the current system, the easier the business buy in. This is also proven by the success of the Berkshares and Cheimgauer models, which are both linked to and backed by national currencies.

In the long run for sustainability, stability and local control, it would be best to these currencies to have a different backing or at least linking to a different unit of account. Though I see little harm in starting with a system that is very much like the current currency system with the explicit of intention of a collectively guided transition to a significantly different model over time, just to get things started and get business buy in. It is my understanding that Berkshares does have the intention of moving towards a more transformative system eventually and they are being strategic in starting out conservative.

All of these systems have their advantages and disadvantages and work best at solving certain problems more than others. So which is a community to choose? Well it depends on your goals and which sector of the economy you want to work on. If businesses in your community are doing fine, but your community is completely alienated and miserable in their 9-5 corporate jobs or people are struggling to make ends meet with low paying jobs, you may want to start a time exchange. If businesses are dropping like flies or unemployment is sky high, you may want to start a business to business mutual credit system, or in a relatively low population and isolated area, perhaps a paper stamp scrip. If you are simply trying to rebuild a self-sufficient local economy but are not in dire need, a buy local rewards program may suffice as a starting point. If your municipality is bankrupt and people are dying of poverty, I think it may be time for the local government to create an emergency local currency program through plastic cards or paper local currency and jumpstart it by funding local services and community projects to provide basic necessities. Both Oakland, CA and Portland, OR have recently put out RFPs for municipal currencies. Preferably this sort of municipal program would be overseen by a community coalition to make sure it is actually meeting the needs of the community. If no one is responding in community and you want to do something fast and simple, host a neighborhood weekly or monthly swap meet or free market to share goods, food, skills and services. All it takes is a location, some flyers, door to door canvassing and one outgoing, friendly organizer.

Martin’s brilliant and subversive innovation, launched last week, is the Global Innovation Commons. The project is described in a cover article in the German magazine Der Spiegel: Patent Lies: Who Says Saving the Planet Has to Cost a Fortune?

The Global Innovation Commons is a massive interactive archive of energy-saving technologies whose patents have expired, been abandoned or simply have no protection. The idea is to let entrepreneurs and national governments query the database on a country-by-country basis to identify helpful technologies that are in the public domain. Once identified, these technologies for energy, water and agriculture are prime candidates for being developed at lower costs than patented technologies.

The World Bank is a partner on this project, along with the International Finance Corporation’s infoDev unit. The World Bank has estimated that the technologies in the GIC database could save more than $2 trillion in potential license fees. The Global Innovation Commons essentially seeks to bring the advantages of the open-source software development model — open participation, faster innovation, greater reliability, cheaper costs — to technologies that are claimed to be patented.

Here’s how the Global Innovation Commons describes the role of patents in impeding innovation — and how the new database helps establish a new open-innovation commons:

For the past 30 years, patents have been abused. Rather than serving the public’s expansion of knowledge, they’ve been used as business and legal weapons. Over 50,000,000 patents covering everything you do have served to keep you from benefiting in many aspects of your life. Many life-saving treatments have been kept from the market because they threaten established business interests. The world’s ecosystem has been severely damaged because efficiencies have been kept from entering the market.

In the face of all this, however, there is the good news: The thirty-year “cold war” of innovation is over. Today, you now have access to it all. In the Global Innovation Commons, we have assembled hundreds of thousands of innovations – most in the form of patents – which are either expired, no-longer maintained (meaning that the fees to keep the patents in force have lapsed), disallowed, or unprotected in most, if not all, relevant markets. This means that, as of right now, you can take a step into a world full of possibilities, not roadblocks. You want clean water for China or Sudan – it’s in here. You want carbon-free energy – it’s in here. You want food production for Asia or South America – it’s in here.

Der Spiegel notes that the Global Information Commons database represents such a huge advance because it aggregates so many different patent-free technologies from so many different parts of the world:

Martin’s

“custom-made software and a vast server are programmed to trawl an compare hundreds of thousands of files containing patent information from what would seem an incongruous list of places: Papua New Guinea, Berlin, the Brazilian rainforest, New york. Some of these patents are now; others have expired. What Martin — and those who work with him at M-CAM — say they found is that one in three patents registered today on energy-saving technology duplicate gadgets that were first dreamed up in the wake of the 1970s oil crisis and are now freely available.”

Martin says that a great many patents are not novel at all. They simply duplicate innovations that were made decades ago. But patent applications often disguise this fact by using colorful and complicated language. And overworked government patent examiners, struggling with limited resources and seeking to avoid legal hassles, often grant new patents that are not truly warranted.

Martin is a major irritant to large tech companies because he is challenging a key rationale for patents — that they are essential in promoting innovation. He argues that patents often serve to impede innovative technologies and make them unaffordable — at precisely the time when all countries of the world, rich and poor, need to adopt cutting-edge energy technologies to cut carbon emissions.

With the recent real estate market collapse paired to wild fluctuations in energy prices, public awareness has emerged of the unsustainability of the conventional American suburb and the systems cultivated to create and support it. Suburbia is now coming to be perceived as a problem; a fundamentally dysfunctional habitat concept in the 21st century context whose negative social, cultural, economic, and environmental impacts are no longer tolerable. Many have predicted that the radical shifts in the cost of energy coupled to the issue of national carbon emissions management and the outright failure of the conventional home financing system would result in a mass re-consolidation of population resulting in the wholesale abandonment of suburbs. Others have suggested that in order for suburban communities to survive they must reinvent themselves around new, more rational, more urban habitat models. In this competition Inhabitat sought to explore the possibilities of that reinvention.

The 20 finalists in this competition present a vast spectrum of ideas about the adaptation of the suburban habitat. Many entires focused on the adaptive reuse of very specific specific suburban structures; the American McMansion and the Big Box store in particular. A few entires were concerned with transportation and the potential obsolescence or reduced dependence on the automobile. But the more significant -and plausible- of the entries were those that focused on the adaptation of communities as a whole in a new urban context and the recovery of underutilized suburban space. The People’s Choice award winner, entitled The Urban Sprawl Repair Kit, was clearly one of the best of these, offering an interesting set of example adaptations of a series of suburban commercial buildings and housing into new urban mixed-use community space. This entry offered one of the best and most plausible visual impressions of the reinvented suburban habitat. Another promising entry in this same theme was the Entrepreneurbia concept, premised on the notion of freedom of zoning restrictions to allow mixed light commercial and agricultural development through resident entrepreneurship within the traditional housing development, creating a decentralization and traditionally urban localization of functional elements of the community that nonsensical conventional suburban zoning has long precluded. One particularly novel concept called Inter-Estates explored the recovery of the space of highway embankments for urban farming and new community development. This was a kind of reinvention of the notion of the Linear City, though the problems of road-side pollution and the use of radical new pylon-supported housing made this a more speculative concept.

A great many entries seems particularly focused on the repurposing of the Big Box store for the sake of recovering its massive space -rooftop and parking area in particular- for urban agriculture. Many novel and plausible approaches to this were shown. This author has long been intrigued with the idea of the conversion of industrial structures, shopping malls, and Big Box stores into co-housing community structures and one of the entires here -entitled LivaBlox- explored the idea of such structures as host to a new modular housing system -though it’s not clear how much of the original structure would actually be retained in this design.

IP rights are beginning to permeate every area of scientific endeavour. Even in universities, science and innovation, which have already been paid for out of the public purse, are privatised and resold to the public via patents acquired by commercial interests. The drive to commercialise science has overtaken not only applied research but also “blue-skies” research, such that even the pure quest for knowledge is subverted by the need for profit.

For example, it is estimated that some 20% of individual human genes have been patented already or have been filed for patenting. As a result, research on certain genes is largely restricted to the companies that hold the patents, and tests involving them are marketed at prohibitive prices. We believe that this poses a very real danger to the development of science for the public good.

The fruits of science and innovation have nourished our society and economy for years, but nations unable to navigate our regulatory system are often excluded, as are vulnerable individuals. We need to consider how to balance the needs of science as an industry with the plight of those who desperately need the products of science.

Clearly it is vitally important that we continue to protect science and enable it to flourish. Science and the many benefits that science has produced have played a crucial part in our history and produced vast improvements to human welfare. It would be remiss if we failed to recognise the importance of science as an industry and investment in research to national and regional economic development; but against these economic concerns (individual, corporate and national) an overriding consideration must be the interests of the public and of humanity present and future. Science as an industry may be booming, but the benefits of science need to be more efficiently and more cheaply placed in the service of the public.

This is of particular concern in the developing world, where drugs that are routinely available in high-income countries are unaffordable or inaccessible, and treatments for diseases of the poor are simply not being developed due to lack of a viable market. Existing inequities in knowledge capital make developing nations hostage to more technologically advanced countries for their basic health and development needs, and restrict the participation in research that would allow them to redress this imbalance.

These are big, complex questions that need to be asked. We need to re-imagine governance in profound ways, not just in terms of local or digital commons, but also with respect to new roles for nation-states and new types of multilateral governance systems.

I was delighted to encounter just such a commons-friendly re-imagining of the world by James Bernard Quilligan, a long-time analyst and administrator in international development and a former advisor to such politicians as Pierre Trudeau, Francois Mitterand, Olof Palme, Willy Brandt, Jimmy Carter and HRH Prince El Hassan. Writing in the fall/winter issue of Kosmos journal, Quilligan describes the failures of postwar multilateral institutions, the enormous potential of the commons and a sweeping vision for a new commons-based system of governance at many levels.

Below, I summarize Quilligan’s visionary essay, People Sharing Resources: Toward a New Multilateralism of the Global Commons. However, I encourage everyone to read the entire piece for a richer treatment of some provocative, thoughtful ideas.

Quilligan starts with a critique of the problem:

We have begun to see that the benefits of perpetual economic growth are not compensating for the vast damages and risks they create — from energy insecurity, global warming, ecological degradation and species loss to hunger, poverty, debt and financial meltdown. We’re also realizing that neither the private sphere of property and trade nor the public sphere of government provision and distribution — which created these problems to begin with — are capable of solving them.

The structures of nation-states and multilateral institutions have made it difficult for governments even to recognize the reality of global common goods, Quilligan writes. That’s because societies have a “pervasive commitment to free markets in driving global economic integration and sovereign reciprocity in making global decisions.”

As a result, all sorts of global commons — things that are neither private goods nor public goods — are not managed responsibly, fairly or sustainably. Fisheries, forests, ecosystems, genetic life forms and species, seeds, climate and atmosphere, not to mention the airwaves, Internet, cultural traditions, ethnobotanical knowledge, and much else — all of these resources have little standing in public policy because they are neither private property nor public goods. They are common goods, which are either gifts of nature or the creations of social communities.

Quilligan proposes new forms of property management for these commons through what he calls “co-governance” and “co-production.” Co-governance means that commoners at the lowest possible level of authority take over decision-making activities that historically have been performed by the state. Co-production brings together resource users and resource producers and providers through open social networks — not as “sellers” and “buyers,” but as co-producers. By establishing self-governing communities of co-production, the commons “formalizes the process of just governance and democratic oversight by closing the gap between resource users and resource managers, producers and providers.”

The process is highly appealing, and works well, because it is all about people “finding new identity and significance through sharing information, seeking consensus-based solutions, keeping value in their communities and distributing the benefits that arise form the use of commons resources.” Many of the dysfunctions of traditional government bureaucracies and governance can be avoided.

Quilligan sees commons-based governance, now occurring throughout the world in countless circumstances, as the basis for a new form of multilateralism: “The co-production of global common goods can now be facilitated through direct collaboration between local resource users and multilateral institutions.”

To facilitate this new order, governments must recognize commons rights for commoners. “Commons rights differ from human rights and civil rights,” writes Quilligan, “because they arise, not through the legislation of a state, but through a customary or emerging identification with an ecology, a cultural resource area, a social need or a form of collective labor.”

He also calls for the creation of social charters, or “commons trusts,” that establish specific legal authority for people to help each other manage and produce what each of them needs. By having legal control of commons resources, trust managers can “keep the value created through the commons within the commons,” and so check the harmful effects of state-supported capitalism that we now suffer from.

A system of commons trusts would benefit multiple parties, Quilligan writes: “Private industry flourishes from the surplus resources which are rented from commons trusts, the socially marginalized and vulnerable receive a subsistence income from the state, and the primary assets of the commons are preserved and regenerated.”

Under commons trusts, value would not be based on the financial value of common assets in the marketplace, but on the “preservation of commons resources and the resilience of the system that manages and produces them…..Hence long-term wealth arises, not through consumer demand, investment or capital accumulation, but in the enhancement of the carrying capacity of the global commons to support life and life systems, expressed through sustainable choice.”

Perhaps the most bracing idea that Quilligan proposes is a new sort of “commons reserve currency.”

Modern societies are locked into a permanent growth imperative — with disastrous consequences for the Earth — Quilligan argues, because of the current system of privatized credit. Banks and financial institutions are constantly pushing individuals and businesses to borrow money. But this debt and the interest on it cannot possibly be repaid except through relentless and perpetual economic growth. This is one reason that markets are constantly seeking to monetize (“extract value from”) non-market realms such as ecosystems, genes, nano-scale matter, social relationships, time, etc. New market enclosures are driven by the need to repay debt and increase returns to capital.

This structural imperative of modern economies can no longer be physically sustained, however The Earth is finite, and the approach of Peak Oil and the limited capacity of the atmosphere to absorb carbon, require us to find new approaches.

One way out of this quandary, Quilligan suggests, is to treat the money system and individual purchasing power as a social commons instead of a private profit center. He envisions the creation of a new international currency whose value is pegged to a “basket of global common goods as resource reserves.” These reserves for the currency would include natural resources such as air and water quality, ecosystem health and biological diversity, as well as cultural resources such as indigenous wisdom, household work and the arts. It would also include social resources such as economic output and income distribution.

This new currency would help stabilize and democratize the control of money. Instead of our current system of privately administered debt, which requires infinite, Earth-destroying growth, we could convert to an equity-backed system of currency that benefits all sectors of society and nature itself.

A new international currency based on global common assets as reserves “would generate a broad measure of common wealth and well-being that is not based on productivity, profit or interest, but on the perpetual vitality and continuous adaptation of local resources to support a good quality of life for all human beings….It would mean using our commons-based capital — cultural, social, intellectual, nature, genetic and material — as collateral for an equity-based global reserve system that issues credit underpinned by these resources.”

An ambitious scheme, obviously. But Quilligan helps us envision structural solutions that can work over the long term, rather than resorting to Band-Aids. Quilligan’s scenario has the unique virtue of being comprehensive in scope, analytically rigorous and conceptually coherent — with the commons as a philosophical centerpiece.

In my view, bureaucracies efficiently employ enormous workforces to execute the same routines everyday. The staggering amounts of conformity successfully avoids both the high cost of deviant conduct and the expensive impacts of high maintenance personalities. Sabel shows us how these efficient organizations function inefficiently when faced with crises. The conformity to foregone routines need to be dropped while new problems get defined, new solutions get proposed, new evaluations get completed and new changes get fully implemented. Collaborative enterprises handle crises much more efficiently. He calls this “A Real Time Revolution in Routines”.

Collaborative enterprises cannot be efficient in the bureaucratic sense. Their functioning involve extra efforts, unforeseen expenses and necessary duplications to arrive at different “path dependent” outcomes. Collaboration is more improvisation than routine. What collaborations can do efficiently is explore options, decide on the least-worst alternative and make changes. Collaborations are inherently resourceful, enterprising and responsive to unfamiliar situations.

When we’ve adopted a collaborative outlook, efficient bureaucracies appear stagnant, slow and unresponsive. When we’re chasing after cost efficiencies and economies of scale, collaborations appear costly, unmanageable and plagued by exceptions to the rule. Because these two mindsets are incompatible, “skunk camps” were created in the eighties to launch new products within big corporations. The team that developed the Macintosh computer stayed away from the rest of Apple. More recently Clay Christensen has advised us to “apply tools of separation” to any disruptive innovation developed internally, rather than seek consensus or majority vote in favor of the disruption.

This emergent collaboration reveals a pattern of vanishing three kinds of chronic management conflicts:

1. staff/line conflicts over authority and compliance issues

2. horizontal conflicts over expertise and access to special knowledge

3. vertical conflicts between managing up to please higher ups and managing down to protect underlings