Given that currencies are backed by states and derive their value from the ability of the state to control how much money is in circulation (including via the regulation of the banking sector), how would a stateless market function?
(I'm genuinely asking, because these ideas fascinate me. I'm not asking as a challenge. I also understand that mutualism is broad and could contain a number of different positions on this point. I also understand that my assumptions may be flawed.)
Some currencies are backed by states, but there are lots of different kinds of currency, adapted to a wide variety of purposes. One-size-fits-all fiat currencies, with manipulation of the supply as the primary means of regulating value, is common now, but is probably pretty badly suited to many uses. Anarchistic communities would tailor thei4 currencies to their specific needs.
That's one possibility. The traditional "mutual banking" model was specifically tailored to different contexts by its early proponents. So, for example, Proudhon's proposal produced currency that was perhaps less "hard," but was also intended for purposes where security was less of a concern, while Greene's proposal emphasized real-property security, for use in instances where long-term stability of the currency was more important.
It's not really accurate to say that money is backed by states; money is really backed by social convention. Think of money as an instrument of debt and trust. Money acts as debt in that it represents the goods and services that society owes you for your labor. You accept it because you trust that you can go to a store and exchange it, not because of the government.
What the government does is control the supply of money to limit inflation, which is ultimately necessary to establish trust that you can get your stuff back. In mutualism, this would be handled by the banking system... Which I'm not 100% clear on how exactly that would work in a decentralized fashion. I have my own ideas of how to have decentralized currency within society today, but I'm not sure how to do it without some sort of legal backing.
One thought I had while reading up on mutual credit was not only capping the amount of debt you could accrue but also running on a negative interest rate, rather than 0% interest. This would prevent the hoarding of funds but also return all accounts to 0, given enough time, thus getting around the issue of trust. You'd need some sort of cryptocurrency or other technological solution, I should imagine.
I'm coming around to the idea. But as far as I can tell, things like Bitcoin operate from right-libertarian assumptions such as an analogy to gold. I'm not an expert on such either.
Ok, I'm kinda new around here so maybe this is obvious, but why exactly would analogy to gold be a problem?
Aside, but why is analogy to gold even related to right-libertarianism in particular? Lots of communities across time and space had commodity-backed currencies that could be analogised with gold, e.g. wampum in the early American colonies. Even the earliest known currency (Sumerian Shekels) were commodity-backed (by wheat, in this case). It's a pretty natural evolution from any barter system where there's a good desired by most/all of the population.
The real issue (as I understand it) is that because Bitcoins, like gold, are limited in supply and increasingly rare, wealth tends to concentrate towards those who got in early, and the currency tends not to be spent but instead hoarded.
I read something somewhere recommended by humanispherian that it is possible to “constitute” goods so that they are equivalent to/backed by money at a Proudhonian bank, thus allowing people to take the actual product of their labor and use it as they would money. Competition in the market (freed from the monopolizing forces of government and private property) then reduces the price of the product to its approximate labor value—i.e. the market achieving socialism.
r/mutualism
Given that currencies are backed by states and derive their value from the ability of the state to control how much money is in circulation (including via the regulation of the banking sector), how would a stateless market function?
(I'm genuinely asking, because these ideas fascinate me. I'm not asking as a challenge. I also understand that mutualism is broad and could contain a number of different positions on this point. I also understand that my assumptions may be flawed.)
Some currencies are backed by states, but there are lots of different kinds of currency, adapted to a wide variety of purposes. One-size-fits-all fiat currencies, with manipulation of the supply as the primary means of regulating value, is common now, but is probably pretty badly suited to many uses. Anarchistic communities would tailor thei4 currencies to their specific needs.
Would this be where mutual credit would enter?
That's one possibility. The traditional "mutual banking" model was specifically tailored to different contexts by its early proponents. So, for example, Proudhon's proposal produced currency that was perhaps less "hard," but was also intended for purposes where security was less of a concern, while Greene's proposal emphasized real-property security, for use in instances where long-term stability of the currency was more important.
It's not really accurate to say that money is backed by states; money is really backed by social convention. Think of money as an instrument of debt and trust. Money acts as debt in that it represents the goods and services that society owes you for your labor. You accept it because you trust that you can go to a store and exchange it, not because of the government.
What the government does is control the supply of money to limit inflation, which is ultimately necessary to establish trust that you can get your stuff back. In mutualism, this would be handled by the banking system... Which I'm not 100% clear on how exactly that would work in a decentralized fashion. I have my own ideas of how to have decentralized currency within society today, but I'm not sure how to do it without some sort of legal backing.
One thought I had while reading up on mutual credit was not only capping the amount of debt you could accrue but also running on a negative interest rate, rather than 0% interest. This would prevent the hoarding of funds but also return all accounts to 0, given enough time, thus getting around the issue of trust. You'd need some sort of cryptocurrency or other technological solution, I should imagine.
Wouldn't negative interest rates have the same effect as inflation in fiat currencies?
I'm honestly not sure. My first thought is no, because you're not actually altering the total amount of credit in the system.
Would cryptocurrencies be a viable alternative in a stateless market? (I know very little — essentially nothing — about crypto currencies )
I'm coming around to the idea. But as far as I can tell, things like Bitcoin operate from right-libertarian assumptions such as an analogy to gold. I'm not an expert on such either.
Ok, I'm kinda new around here so maybe this is obvious, but why exactly would analogy to gold be a problem?
Aside, but why is analogy to gold even related to right-libertarianism in particular? Lots of communities across time and space had commodity-backed currencies that could be analogised with gold, e.g. wampum in the early American colonies. Even the earliest known currency (Sumerian Shekels) were commodity-backed (by wheat, in this case). It's a pretty natural evolution from any barter system where there's a good desired by most/all of the population.
The real issue (as I understand it) is that because Bitcoins, like gold, are limited in supply and increasingly rare, wealth tends to concentrate towards those who got in early, and the currency tends not to be spent but instead hoarded.
I read something somewhere recommended by humanispherian that it is possible to “constitute” goods so that they are equivalent to/backed by money at a Proudhonian bank, thus allowing people to take the actual product of their labor and use it as they would money. Competition in the market (freed from the monopolizing forces of government and private property) then reduces the price of the product to its approximate labor value—i.e. the market achieving socialism.
Was that Iain McKay's article on "Proudhon’s constituted value and the myth of labour notes"?
Indeed.
That sounds intriguing. I wouldn't mind a pointer to the text, if anyone has a link.
https://anarchism.pageabode.com/anarcho/proudhon-constituted-value-myth-labour-notes#surplus
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