Saturday, 14 April 2012

4. The alternative electronic (local or global) currencies systems, direct e-democracy and coopeartives



We start with the remark that the current monetary system is inflating annually the currency.

See e.g. the euro, at the site of the European Central Bank (ECB)

http://www.ecb.int/pub/annual/html/index.en.html
and also a site with interesting statistical data
http://www.shadowstats.com/

For other sources of data, see also , ftom the INET institute 
http://ineteconomics.org/blog/money-view/fed-ecb-balance-sheet-update

In the latter link we discover also, the remarkable situation, where the assets of the FED (which is a private bank) are more than 25 rillion dollars, while all the GDP of US is only about 15 trillion dollars (see e.g. http://en.wikipedia.org/wiki/US_economy ). For the Eurozone, the corresponding figures are, 2.5-3 trillion euro, the assets of ECB, while he eurozone GDP, about
9.5 trillion euro (see e.g. http://en.wikipedia.org/wiki/Eurozone). There is no doubt for the overhelming finacial power that the central bank, as a private organiation, has to the whole of the economy of the corresponding currency zone. Obviously a larger finacial power than the Public sector itself, and any other private organization. 

The next table of the annual report of 2011, shows the accumulation of money in circulation from 2001 to 2011, in banknotes (M1). To convert it to real-life banking money (M3), it must be multiplied by 10 which is the standard fractional reserve ratio of the banking system (e.g. a banknote of 100 euro in banks, is essentially owned by 10 different owners, so it is accounted and it flows as 1,000 euro)




In the annual report it is recorded that every year the  ECB is issuing new banknotes, that when converted to bank-money (at a fractional reserve rule of 10, that is multiplying them by 10) it gives at least 15% new currency every year. If the ECB would be a non-profit organization, belonging to all the European states of euro, then these money would go directly to the public sectors, without borrowing and interest rates. No over-debt would exist in the societies!
The next table is for the money in circulation M1 (banknotes) and real-life banking money (M3) in the dollar currency. We see here that the FED is by far more aggressive than the ECB, and since 2008 has doubled the banknotes in circulation (!) through the QE1 (quantitative easy 1) and QE2 which ended in 2012




The current post is devoted to the design principles of a monetary system which would not suffer from over-debt. Such a monetray system should have two properties

1) Only the public state has the privilige to issue new currency (Ministry of Economics). No private for-profit organization can have such a privilige.
(This guarantees that the public sector will never be in over-debt)

2) The newlly issued currency each year, is circulated in society with less than 20% through debt and more than 80% through other non-debt channels of flow.
(This guarantees that the rest of the society will never be in over-debt)
Here is a site with similar ideas and recommendations for a simple change of the monetary system that would prohibit the crisis of over-debt returning periodically every 50-80 years.

As a general concept of electronic currency monetary systems, that do not create periodically over-debt crises   we may conceive monetary systems with the following rules

1) Only the public state (or collective agent)  has the privilege to issue or withdraw from circulation, currency. And when it is issued it is public good belonging to all people. The institution that issues the currency is public, not private and it  , circulates it , by less than 20% through lending, and by more than 80% through, investing, salaries, subsidies etc. 
2) It is not allowed by law any  banking system (including central banks) based on any fractional reserve rule, as this is very greedy, with very high leverage, unstable and dangerous for all the economy, as the history of more than 1 century has proved.  All lending and borrowing is done by organizations , that simply match the supply of lending, with the demand of borrowing, (without transferring the ownership of the money from lender to them, and then lending it to the borrower). The risk and ownership of the money is to the lender. The organization simply takes a fee or provision for any borrowing, like the real estate agents do in buying and selling transactions. 
3) There is an economic inequalities reduction tax, which creates the minimum unconditional income of all citizens. This is done through  a fixed tax rate on the total assets plus revenues of each citizen and enterprise (fixed assets and also revenues e.g. through a fixed percentage tax rate t<1  on an exponential function Exp(x) of the assets+revenues=  A, so that tax=tExp(A). The funds raised by the public state from this tax, are used to pay, the  minimum unconditional monthly income U of every citizen of any age, either working or not. The U covers,  basic minimum standards of living, (food, cloths, etc. , health care, transportation and shelter). 
4) There is a transparent, and agreed rule, to issue or withdraw currency, but mainly the amount of money is fixed. Such a default rule e.g. could be that the currency is almost a constant percentage m of an exponential function Exp(x) of the total wealth W of the society (the sum of  fixed assets and gross national product, If W the total wealth and M0 the amount of M0 currency, that is banknotes and coins, then M0=mExp(W). ) Or in a more evolved and fair society the currency is a direct function of the size of the population P: M0=kP
5) There are an agreed rule or   periodically redefined exchange rates with the other currencies


 Here are some forms that money interplay  is experienced in our life

Money experienced as
1) As share in the goods of the planet
2) As means of transactions
3) As a  totalitarianism in the human feelings, where everything with monetary price is compared with everything else with monetary price and measured with the total or linear  numerical order of money values.
4) As measure of human working activity
5) As raw material to organize business and group activity, or operational human power (human capital)
6) As constraint due to debt in the activities, or friction in the  production activities.
7) Conversely when in abundance, as measure of freedom in personal activities
8) As technique and technology  of exercising  power by a minority of humans over the majority of humans
9) As a technique to create inequalities in the living standards and also create hidden social power other than politics. 
10) As means of persuasion
11) As macroscopic "temperature" of social activities
12) As means to regulate fair agreements, deals, etc
13) As embodied value of precious metals in the coins.
14) As difference of prices of same goods between different nations with different currencies.
15) As only the liquid part of the economic value of fixed assets, like real estate etc In other words in a society, money is only the smaller part of the total economic value of assets or wealth, both for the individual or the public sector. 
16) As a measure of how much a social entity (an individual or group of individuals) contributes to the civilizations versus how much the civilization contributes to this entity.
17)  Lack of money is deprivation of freedom due to the need and a high monetary wealth in society from an individual or group of individuals can be an indirect way of deprivation of the freedom due to  need of other people that do not have this wealth , and cannot   access  goods and services of  the civilization.

18) As a privilege to issue money and own it, by a minority who then controls the majority by lending it to the majority (current banking model of money).

19) Money creates a monarchy in the world of subjective emotional values of experiences, as it forces the comparison of any two valued experiences. On the contrary in pure subjective emotional evaluations, not any two experiences are comparable. 

20) Money units can be considered as rights for units of physical energy ! And so money could be correlated to solar and other renewable energy produced within a time interval. The rights for physical quantities of power (energy/time) and action (energy*time) are also to be correlated with money. 

 21) As a type of quantitative measurement of social and productive activities, for the purpose of action optimization relative to energy, raw materials, and human effort. (This requires only the measure of value aspect of money, not the value embodiment and the private property aspect of money). 




We may summarize the trend of evolution in humanity in the following 3 stages 

Feudalism: A Royal  oligarchy gains it power over the majority my owning the land.
Capitalism: A larger than the Royal oligarchy gains it power over the majority by owning the issuing and circulation of money.
Digitalism: An even larger oligarchy than the large capital of the banks, gains its power over the majority by owning the circulation and distribution of the information inside and outside  the internet.

In all these three stages of evolution , there is the source of will that always a minority will control the majority, and also a source of will that the majority controls the majority with self-responsibility and participative democracy. The battle is constant but the evolution is toward more liberty and equality. 
HUMANELY MONEY AND BITCOIN.

Bitcoin suggests the idea, that any person with a computer is entitled to issue currency, that belongs to him/her. In bitcoin this is called "mining". Only if, the bitcoin has much more value relative to USD and EUR, normal mining by a single person would be adequate to create a minimal surviving income. But why involve computers and algorithms of encryption? Here are two simple rules that can be enforced by law, that a currency that may be called HUMANELY MONEY can be issued and circulated

RULE 1. Every person has the right to issue a fixed amount of currency monthly that allows him to his basic needs to survive. (Food, clothes, health care, shelter, transportation etc). This amount may exceed his needs in which case it may be reserved and managed by the collective state for social and ecological needs, in such a way that in total 60% of the total economic value is liquid and is currency (compared e.g. to fixed assets). (The rule of 60% is in correspondence to that 60% of the biosphere and 60% of the biological bodies are liquid) .  


RULE 2. At the death of a person all currency that he/she possess is annihilated (So this currency . for constant population and length of life is not inflationary). 

We must remark here that almost all forms of money and monetary systems, include the rule that money should measure the contribution to the civilization of  an entity (an individual, or group of individuals or enterprise) as inflow and conversely the contribution of the  entity (an individual, or group of individuals or enterprise) to the civilization as inflow, where the balance of outflow and inflows determine the wealth of the entity. But this very rule of all forms of money suffers to be correct and fair at least for the next reason:  The contribution of the civilization to the individual is almost always by far greater from the contribution of the individual or group of individuals to the civilization, at least for the simple reason, that the civilization has accumulated for eons , inventions and technology of goods and services, while the individual or group of individuals has only a mortal life of opportunities to contribute. It thus a non-fair rule! Therefore if one was to push strictly this rule, then almost all the individuals and group of individuals in the civilization should be in the negative as far as wealth money  balance is concerned! 
Therefore in the next when we describe, analyse and assess different forms of monetary systems we should not forget this , and we should not consider their new rules of money as the absolute justice in the interaction of a civilization and an individual or group of individuals. 


 As one of the best example of  a monetary system without overdebt is the Gradido, 
(see http://gradido.net/en/Book/c/1/the_book  ) in which the ammount of money in circulation is constant!

The Gradido monetary system, besides the properties 1) and 2) above that make it a non-overdebt monetary system, has also four additional properties, which make it socialistic, egalitarian and ecological.

3) It creates a free  basic standard of living for every body.
4) It stimulates, monthly, a basic finacial equality among the citizens. 
5) It is very simplified egalitarian and efficient as far as taxes are concerned
6) It budgets directly for the  ecology and environmental protection , and it is in fact based on the wisdom of nature
The rules of the Gradido are very simple

1) Each month the public state issues for each citizen , 3 amounts of money (A,A,A)
(let us say A=1,000 gradido, or in general an amount that allows for a free decent life in normal standards of living). The first A, goes for the living needs of the citizen, the second A, goes to the state as if  a tax, and the third for the ecology and the environment.
2) As all natural resources , so the gradido currency too, and in order to avoid, inflation, due to the monthly issuing of currency, the currency loses in an obligatory way 50% of its value, annually (of about 5% monthly or 0.2% daily)


In this monetary system, the amount of circulating currency is in the average constant (assuming no diffusion outside the domestic economy) and if all monthly cash was saved each person would accumulate on the average about 20,000 gradidos. This amount is essentially depended on the size of the population and the standards of living. Variations where it can depend on the volume of produced goods and services in the society is discussed below. The reader is invited to download and study the book of gradido here

 http://gradido.net/en/Book/c/1/the_book


The gradido currency system   directly offers a minimum garateed survival subsidy for all citizens. 
If we think of the civilization as an inheritance of inventions (electricity, knowledge of flying, cloth making, medical drugs use, engineering knowledge, agriculture knowledge etc), then all newly born citizens of the civilization have equal right on the civilization inheritance.   But by not having money , when starting from childhood and then early young age of 18 years old, your are not entitled  to this inheritance! And then in the rest of your life if due to unemployment and debt-crisis in the civilization you continue not to be entitled to this inheritance or having right to it in severe unequal way compared to those that have accumulated the money in the society. This is obviously unfair and proves a negative intention behind it with negative consequences for both the atoms and the civilization.   Therefore a right of each individual for guaranteed minimum survival subsidy in all ages is a minimum correction of this injustice. It is a right similar to the right for free health care in all ages.

A very similar or almost identical monetary system had been applied in the previous century crisis, in 1932, in the Austrian town of Worgl. It had great success, unemployment almost disappeared, and the town from severe crisis, passed to prosperity. Unfortunately as it was very early at that time and all currency had to be backed up with gold, the Central Bank of Austria forced the town to stop using their currency. 
See e.g,

The concept of money corresponding not to gold (free-money or freigeld) was initially since the 19th century, introduced and developed by the economist Silvio Gesell

http://en.wikipedia.org/wiki/Silvio_Gesell

 http://en.wikipedia.org/wiki/Freigeld

Also John Maynard Keynes had proposed in the previous major finacial crisis during the 20's and 30's of the 20th century, a global currency that its unit worth corresponds to a basket of mainly tangible goods of a national economy. It was called bancor:

http://en.wikipedia.org/wiki/Bancor

Besides the case of Woergl and gradido, other successful realizations of this concept is the 
Wirbank in Switzerland since 1935

 http://en.wikipedia.org/wiki/WIR_Bank

 http://www.wir.ch/

 and a similar business in Italy, the currency sardex (and similar to it in some towns in Italy)

 http://www.sardex.net/

A presentation of how sardex is working 

http://www.internet-science.eu/sites/internet-science.eu/files/uploads/Sardexnet20140721%20copy.pdf

 In the cases of Wir bank and Sardex, the transactions in the local electronic currency are paying taxes as if they were done in the global existing bank-currency (CHF, and EURO).

Another example is the terra currency, by  Bernard A. Lietaer

http://en.wikipedia.org/wiki/Terra_(currency)

http://en.wikipedia.org/wiki/Bernard_Lietaer

Here is a power-point presentation of  the basic ideas of Bernard A. Lietaer about how solving the current finacial crisis, through terra.

http://www.worldacademy.org/files/Options%20for%20managing%20systemic%20banking%20crisis%20by%20Bernard%20Lietaer.ppt

http://www.lietaer.com/category/proposals/

There are many  crypto-currencies  like bitcoin in various countries 

http://grcoin.gr/

Here are some opinions and discussion of the students:

Student 1: Gradido is very good in providing a survival salary in all ages (basic income)

Student 2: Gradido would never be accepted as a countries currency, because money losing 50% of it value annually is an unnatural feeling about money: You cannot save money and deposit them and keep its value.You would feel as if always losing.

Student3 Sir, you say that in Gradido, money loses its value by 50% annually. But about what money are we talking M0, M1, M2, M3 or M4?

Lecturer : I mean money M2 only not M3, or M4. My apologies I should define gradido withing the standard concepts of theory of money.

(Parenthesis: In macroeconomics money is classified by layers as different entity and behavior
M0=coins and banknotes only
M1=M0 + Bank checking accounts+travelers checks
Μ2=Μ1+Bank saving accounts
M3=M2+immediately liquidating element (e.g. repos)
M4=M3+short term government bonds

see e.g. http://en.wikipedia.org/wiki/Money_supply

)

Student 4: Gradido cannot be applied to only one nation while the other nations utilize the older type of money, as it would create huge gaps: E.g. if gradido would apply to Canadian dollar, then no other country would prefer to keep as foreign currency the gradido-canadian dollar, as it would lose annually 50% , compared to other currencies like euro, US-dollar etc that would keep its value. Gradido monetary system may only apply simultaneously for all nations.

Student 5: I agree with student 4. In addition if e.g. it would apply to Canadian economy, as there would be no taxes, other than the rules of gradido, many US companies and European companies would consider Canada, as a tax paradise, (as they would not pay any taxes for their business) and would create offshore companies in Canada, creating great troubles to the other domestic economies.

Student 6 . Sir ! Why the percentage 50% in losing its value for money in Gradido? What if it waw 30%, 20%, 10% or 5%?
Would it not hold again that after some time the total M0 money would be of constant ammount in the economy? (of course the smaller the percentage the larger the total asymptotic amount. And why not a variable x% that would be defined by collective democratic procedures?

Lecturer: Yes, even with X% losing its value annually, it would be a monetary system of constant M0 amount of money.

Student 7: Sir, what about M3, M4 money in Gradido? Are they of constant amount too?

Lecturer: No, it is not of constant amount in M3, M4 money in gradido.

Student 8: Why impose losing its value annually by x%, and not just applying a money tax of x% of M0 or M2 money for every one who has it? Then use the money from this tax, and pay the three amounts for every citizen

Student 9: Yes Sir, why not? This would solve the foreign currency reserves problem mentioned by student 4. 

Lecturer . Indeed such a money tax would be a kind of equivalent, although more complicated to apply, plus some tax avoidance cases.

Lecturer : Your discussion gives me the idea to introduce a bit different type of monetary system compared to gradido, that my be called Water-cycle money, as it mimics the circulation of water in the biosphere:
a) water evaporation from the sea, would correspond to money losing its value in an obligatory way by x% annually. 
b) rain from the clouds would correspond to the state, issuing new currency annually in exactly equal amount (=Total money in circulation of last year multiplied by x%), and giving them 1) as basic unconditional income to every citizen 2) Keep the rest
for state needs , environment and import-exports balance.
In this way we have by definition that the amount of money in the society is constant.

Student 10 Sir, again the water-cycle money would have the same problem with gradido as far foreign currency reserves is concerned , why not just put a x% money tax while money does not lose its value annually, and then use this tax for the basic income and the other needs of the state?

Lecturer : Indeed it could be done with a money-tax, or even with a single net-wealth tax. A net-wealth tax is in fact a more stable source of income for the state, compared to the current taxation system that taxes the flow of money rather than the wealth. And the flow of money is variable in an evolving economy and more unstable compared to net-wealth (in money in real estate or what ever).

Student 11 So if you say that it could be done with a money-tax, then somehow gradido is more or less equivalent to the next new
rules in economy
a) The state only issues money
b) There is a single money-tax annually of x%
c) Part of the funds from the tax, is used to provide a basic unconditional income for all

Lecturer: About correct , but not in the details.



Further remarks and speculations about new electronic currencies.

 As a general concept of electronic currency monetary systems we may conceive monetary systems with the following rules
1) Only the public state (or collective agent)  has the privilege to issue or withdraw from circulation, currency. And when it is issued it is public good belonging to all people. The institution that issues the currency is public, not private and it  , circulates it , by less than 20% through lending, and by more than 80% through, investing, salaries, subsidies etc. 
2) It is not allowed by law any  banking system (including central banks) based on any fractional reserve rule, as this is very greedy, with very high leverage, unstable and dangerous for all the economy, as the history of more than 1 century has proved.  All lending and borrowing is done by organizations , that simply match the supply of lending, with the demand of borrowing, (without transferring the ownership of the money from lender to them, and then lending it to the borrower). The risk and ownership of the money is to the lender. The organization simply takes a fee or provision for any borrowing, like the real estate agents do in buying and selling transactions. 
3) There is an economic inequalities reduction tax, which creates the minimum unconditional income of all citizens. This is done through  a fixed tax rate on the total assets plus revenues of each citizen and enterprise (fixed assets and also revenues e.g. through a fixed percentage tax rate t<1  on an exponential function Exp(x) of the assets+revenues=  A, so that tax=tExp(A). The funds raised by the public state from this tax, are used to pay, the  minimum unconditional monthly income U of every citizen of any age, either working or not. The U covers,  basic minimum standards of living, (food, cloths, etc. , health care, transportation and shelter). 
4) There is a transparent, and agreed rule, to issue or withdraw currency, but mainly the amount of money is fixed. Such a default rule e.g. could be that the currency is almost a constant percentage m of an exponential function Exp(x) of the total wealth W of the society (the sum of  fixed assets and gross national product, If W the total wealth and M0 the amount of M0 currency, that is banknotes and coins, then M0=mExp(W). )  Or in a more evolved and fair society the currency is a direct function of the size of the population P: M0=kP
5) There are an agreed rule or   periodically redefined exchange rates with the other currencies
Under the term VOTE-MONEY we mean , a currency with the properties
1) Only the public state has the privilige to issue new currency (Ministry of Economics). No private for-profit organization can have such a privilige.
(This guarantees that the public sector will never be in over-debt)

2) The newlly issued currency each year, is circulated in society with less than 20% through debt and more than 80% through other non-debt channels of flow.
(This guarantees that the rest of the society will never be in over-debt)

3) It is issued periodically at the start of each short period and it loses its value abruptly after the end of an equal or larger period. (. E.g. it is issued monthly and it loses it value at the end of the year, or after  the end of 5 years. This gives it the function that leads to call it vote-money. Buying something is like voting it among other products)

4) It creates a free  basic standard of living for every citizen.
(This means that there is a rule that gives e.g. monthly, at least a minimum amount of it as subsidy to every citizen)
5) Part of the issued currency at every period is, under a rule, reserved for the environment and the external interactions of the domestic economy with the economies of the rest of the world. (e.g. like the gradido's third amount A, that goes for the ecology and the rest of the world)

 Unlike Gradido a vote-currency is issued periodically, and distributed without debt to the citizens acording to some rules, and it expires abruptly and the end of a period. (E.g. it is issued annually at the start of the year, and expires at the end of the year.  This means it has no value at all after the end of the year.) 

 Because of its resemblance to votes in decision making and their expiration after the decision, it is called vote-money.

"Markets are just a voting system to decide prices"  Warren Bufett

VOTE-MONEY may define different electronic currency monetary systems, according to their further rules. Different types of VOTE-MONEY may have different rules about

 1) Distributing the monthly issued currency equally or unequally according to some formulae among , households, enterprises, and the public state.

 2) Having an inherent taxing rule (like gradido) or using the usual taxing-systems.

 3) Depending the total amount of currency in circulation on the population size only, and basic standards of living  (like gradido) , or/and on the volume of produced services and goods (GDP) or/and on the total wealth (including fixed assets) of all the society

 4) Dealing with explicit or not rules with the diffusion of the currency outside the domestic economy. (e.g. 70% of the dollar currency is now at non-American hands, Arabs, Chinese etc. And officially 20% or more of the euro currency is outside the euro-zone. In the current monetary systems this is compensated with inflating the currency. But in a vote-money monetary system, it can be dealt with a fixed explicit rule of reserving a percentage of the monthly issued currency for all transaction with outside economies, imports and exports. In this way it will put an upper bound to the externally exchanged wealth as percentage of the inner wealth of the economy. )

 5) Being exclusive currency for a domestic economy or being in percentage at each price , over a traditional currency. 

The next of the  post is quoted from a blog that I am a follower:

 The next ideas could be as well be described in a novel of not scientific fiction but rather economic fiction.
They can as well be considered a philosophy or vision for an  alternative economic system where the old money are substituted with the electronic vote-money.

In the vote-money economies, money have a different function and therefore different meaning and related moral sentiment. In the vote-money economics money is just votes. When you buy a product you exchange it with votes, that represent your preference in utility, and activities. The advancement of economics and the internet permit the various functions of the vote-money to be done electronically with high efficiency and easiness.

1. Propagating the abandoning of the "rule of gold" and freedhom to print or issue money  from macro-economics to micro-economics and household economics: Money as votes.
The vote-money may sound completely different from the ordinary money that we use right now, but essentially they are not much different if seen from a macro-economic point of view and not household economics. In other words, the ordinary money at a macroeconomic scale are  already vote-money in spite the fact that we do not usually understand it, except probably by some well educated and studied economists. After the abandoning of the "rule of the gold"  domestic economies have the right to print or issue currency according to their policy of liquidity. In other words the money of the central bank can be created from zero and can be eliminated to zero under appropriate rules. This is exactly what vote-money are, exept that with vote-money this ability of printing or issuing money, occurs also at the scale of micro-economics of an enterprise, and at the scale of household economics (or nano-economics) of an individual. And seen from the scale of household economics such money take now a different meaning that of voting for some products, services, activities etc.

2. The rules of the vote-money for an individual. The new  moral sentiments  and feelings of the vote-money.
Each individual as birth and living right , is granted each month (or year) a number of votes to utilize or save. This is from childhood till old age , till he or she dies. The vote money that he or she have at the end of their life are cannot be inherited to their children or relatives, as they represent the right and choices of their free will when living and not of another person. So vote money are created from zero and are eliminated to zero. With these vote-money the individual can satisfy  daily and monthly the basic needs (see A. Maslow's two lower levels of needs, physiological and safety) of living, eating, cloths, basic transportation, and shelter. The vote money are sufficient for this. The producers of products and services as it is done now, determine a basic lowest price of the good and services, that a buyer must pay in vote money, to acquire them. By paying in vote-money he essentially votes the producers for the value of their activities and utility in society of their products or technology. Any additional voting above the lowest price is utilized by the producers as vote-financing to improve the quality of their products and invent more in this direction. Because of the continuous "salary" of vote-money for each individual there is psychological safety, and basic prosperity for all, from what a planet can produce, say for a population not larger than 10 billions. Of course this makes many individuals to choose not to work further, and live a humble basic life. Usually it is for some time intervals only  for each individual.  But this is not fatal for the society. E.g. in societies of ants there is a 50% "unemployment" and still such societies are doing well for millions of years.  
(For the science of biomimics or biomimicry see e.g. http://www.ted.com/talks/lang/eng/janine_benyus_biomimicry_in_action.html  . And for the longest living organisms in nature see e.g. http://www.ted.com/talks/rachel_sussman_the_world_s_oldest_living_things.html ).
Society benefits vastly more from individuals that love what they are doing, that individuals that work by forcing themselves just to take some survival money.

3. The rules of the vote-funds for an enterprise.
The rules of creation and elimination of vote-currency at the scale of an enterprise are almost identical with that of a domestic economy. But at the final termination of an enterprise, their vote-currency is also eliminated.
4. The rules of the vote-currency for a Domestic Economy.
The rules of issuing the right for a number of vote-money in a central bank of a domestic economy are almost the same as in the present financial system, except that they are transparent and rationally stated, including the dependence of the liquidity on the activities through the measurement of the national gross product, and including the loss of the liquidity through the diffusion of their currency in other domestic economies with different currencies. 

5. A. Maslow's levels of needs or values and monetisation/de-monetisation with the vote-money.

 In a vote-currency economy  is easier to monetise or de-monetise various levels of the A. Maslow's needs, desires, values or goals, without hurting the feelings of individuals or prison them in the tyranny of regressive rather than progressive application of finance.
6. The internet. open source economics and the vote-economies.
The open source ecomomics help much in de-monetising the various A. Maslow escalation of needs, desires, values or goals.
(see T. Friedman : "The world is flat" http://www.thomaslfriedman.com/bookshelf/the-world-is-flat) and as Open Source Economics (see http://blog.ted.com/2008/04/16/yochai_benkler_1/ ). 
7. The resolution of the extravagant debt-crisis in the vote-economy.

 We notice that in the vote-money economy, the financing of individuals , enterprises, and the state is also automatic as time goes on, which makes the present economic situation of debt-crisis resolving by....just increasing it but at the same time transforming the meaning and mechanisms of creation and elimination of money.

  



8. A better quality, more human with less tyranny and less over-active in vain waste of energy and efforts economic world with the vote-money.
As the 1st levels of needs, physiology and safety are universally satisfied by all individuals, life in such vote-money economic system is  more human with less tyranny. But this cannot occur if the over-activity in vain and waste of efforts in the preset capitalism would not reduce, permitting larger centralizations in the production and administration of the biosphere that are more economic and efficient. On the other hand, that traumatic failure of the soviet system (and tyranny) proves that such a higher centralization cannot succeed if the Leaders, and Managers of such centralization do not have also higher metaphysical and social maturity. So the ability and success of such a vote-money economic system depends also not only on the new institutional decisions about money, but mainly on the metaphysical, personal, and social maturity of the best of the individuals in the society that could run the management of centralized production units.


     The next video is essentially a history of the current monetary system , after the abandoning of the rule of gold, till today. 
       It is an interesting video by Mike Maloney, for the need of a new monetary system is at 

http://www.youtube.com/watch?v=tj2s6vzErqY



AN EXAMPLE OF PRINCIPLES AND RULES FOR LOCAL CURRENCIES WITHIN THE OLD BANKING CURRENCY 

Let us talk for a moment about some deep and universal phenomena in Economy
1)     (PRIVATE PROPERTYàEXISTENCE OF MONEY)It is obvious also that the very existence of the use of money is directly linked with the existence of private property. If there would not be private property (and all belonged to all) then there would be no need for money. Instead of transactions we would be concerned only with the accessibility of goods when needed.

2)     (INEQUALITIES AND UNIVERSAL ATTRACTION OF MONEY)  When talking now about economic and private property inequalities, we should realize that although money permits its appearance, the basic cause is the business growth of economic organizations! The inequalities are described with the Pareto distribution, and the rule “More than 80% of the wealth is concentrated to les than 20% of the population”” Mathematicians of MIT have proved that if a set of  economic organizations (even starting with the same size!) start at a time moment and their rate of growth is randomly uniformly distributed, then after a finite time, their size distribution would be the Pareto distribution. The same would happen even if the size and  rate of growth is the same to all, but they start at different time moments. Therefore it  is the unregulated free growth that creates it. This rule applies to 1) The size of cities 2) the size of internet sites 3) The size of stars etc Then of course another phenomenon occurs that could be called “Universal attraction of wealth”. In other words more money attracts more money etc.
3)     THE COLLECTIVE USUALLY OFFERS MORE TO THE INDIVIDUAL THAN WHAT THE INDIVIDUAL TO THE COLLECTIVE. This is apparent e.g. in the internet and use of the information. If every bit would have to be bought and sold before it can be used, then all the magic of internet would be lost. For if the only money one could make is by selling his own information in the web, then this would be very little to buy the information it needs from the web. Obviously the information uploaded by each individual in the web, is by far less that the information downloaded.  From this point of view , in my opinion zero-sum credit complementary currencies are  a very limited  concept of money, centred around the transaction. And if extended to cover all the money issues of an individual, it would be unfair for the individual.  One may say that the idea of zero-sum of what an individual offers and received from the collective is standard capitalistic trap, to force people work for those that have the money (and do not make them though their own work), under a concept of seemingly fair rule.

Let us put some terminology to easy the discussion
From the 2 properties of money
1)     Unit of measurement of value of other goods
2)     Store of value
If both hold for a currency let us call it 1st generation money , while if only the 1st property holds and not the second let us call it 2nd generation money. 1st generation money can be bought and sold  and borrowed with interest, but 2nd generation money cannot (it has no interest rate too). Obviously the bitcoin is not 2nd generation money, while complementary credit currencies like Sardex is 2nd generation money. Also the internet currency gradido (by Bernd Huckstadt, http://gradido.net/en/Book/c/1/book ) is 1st generation money too.
Also for the 1st generation money if in order to issue it one requires collateral (to be backed up with e.g. gold or a basket of  goods and services) let us call it collateral money, while if it is possible to issue it without corresponding to an already existing good zero-generated money. For example the current banking money is zero-generated money.
Now what are the desired experience for money that we would like so as to improve social life and the existential experience of it?  In my psychology and perception the next would be the desired properties
1)     We want money that frees from financial slavery (e.g. minimum basic income).
2)     We want money that everybody can issue and is not the privilege to few only
3)     We want money that provides capital (equity not debt) to anyone who want to make a growing business
4)     We want money that is not tied directly to private property , as few only have sufficient large private property
5)     We want money that its rules allow the decrease of private property inequalities.
6)     We want money that  is closer to the functions of the free  flowing  information of the web, rather than money   tied to static private property.
Therefore under these desired properties , we should favour
1)      2nd generation money versus 1st generation money
2)      And from 1st generation money , the zero-generated versus  the collateral money.

We do live in a world of 1st generation and zero-generated money , which is more intangible, than the collateral money which is more hard materialistic.  I believe we should no go back to collateral money. People trading in stock exchanges (when they do not lose massively money) experience the idea of making money from nothing. Although this may seem and be parasitic , we can convert this feeling to something fruitful for the productive economics . We should take the zero-generated money and transform it or the sake of liberating financial the majority and reducing economic inequalities. It  seems to me more spiritual, more magical and with more degrees of freedom to define what we want with money. 
The next rules and principles for local currencies are variations and synthesis of similar rules of the local currency of Woergle in Austria in the decade of 1930, and of the modern  Sardex local currency in Italy.

The rules below define a parallel currency to the banking currency, which is not inflationary, does not have floating  devaluation relative to the banking currency , includes the subsidy for minimum survival, and all taxes are paid in full in the banking currency. 
PRIVATE ENTERPRISE LOCAL CURRENCY WITHIN  THE OLD BANKING CURRENCY.

GENERAL PRINCIPLES

(The principles are desired , but maybe they are not all principles  realized by the rules)

1. Principle of   democratic equality

Whenever new currency is issued, it belongs to the collective equally to all. All members are equal with respect to the rules of the currency. The value of the currency corresponds to the productive and wealth creating ability of the people as atoms and collectively. Every situation and intention for productivity by a  person or group of persons that will be good for the collective,  and if the upper limit of percentage of money to the non-money wealth of the society is nor surpassed, is a good reason for issuing of money to create more than 80% equity capital (and not borrowed liability capital) to support the productivity. 

2. Principle of  consistent inheritance of the civilization to all

Every person has the birth right till the end of his life to basic goods and services for good survival . This is done through the minimal subsidy of survival, which defines a non-zero-sum periodic  residual for every person

3. Principle of non-proprietary  money (2nd generation money) and proprietary money (1st generation)

2nd generation money money is only abstract  units of measurement of economic subjective value , therefore it cannot be property of anyone. Currency cannot be bought sold, lent , or borrowed, on an interest  rate. Instead of owning amounts of currency, there is the almost equivalent concept of  temporary credit from the collective to any member of the collective , for  any goods and services that the collective can provide, measured in units of economic value. The value of the currency corresponds to the productive and wealth creating ability of the people as atoms and collectively. 1st generation money has the properties 1) portable 2)for purposes of means of exchange and transactions 2) It  units of value that measure the value of goods 3) It is the store of value. But 2nd generation of money has the properties 1) 2) but not 3) as it is not store of value. Therefore here we are taking about 2nd generation money. 
Modern 1st generation money that are also store of value, most probably should be a fixed basket of goods and services. E.g. the unit could be a basket of goods and services that an average person needs for a decent life during one month. Non-proprietary money (2nd generation) can be converted to proprietary 1st generation money according to in advance decided and agreed rules. 

4. Principle about  the amount of currency 

The amount of existing currency at each time is related in a monotone increasing way to the a) size of the population b) Volume of activities c) Volume of tangible wealth or assets, locally produced or imported.
For small collectives, that the accounting and evaluation of the assets is difficult the dependence of the amount of currency  on the 3rd factor  of assets is not used.
The rules are such that for constant population, volumes of activity and tangible wealth, the amount of currency is asymptotically constant (so no inflation is created by the rules of the currency itself). For example if only the c) factor of the Volume of tangible wealth or assets, an example of corresponding size of money amount would be 66% (=2/3). 

5. Principle of reduction of inequalities

The collective network puts rules, so as to reduce in a consistent way the financial inequalities.

6. Principle of non-central authority

The administrators of the collective network have no privilege as far as issuing, and distribution of the currency compared to the members.
7. Principle of non-debt society.
The issued currency is circulation from the issuing agency to the collective  mainly (e.g. at least by 4/5 ) with other ways than debt.
8. Principle of economic autonomy
The rules are such that the collective can sustain itself economically for an indefinitely time under normal conditions. This means that exports and imports both for tangible goods and intangible services are not non-balancing in  systematic way  in such amounts that supersede the ability of payments  by the collective.

RULES OF THE NETWORK

The members of the local currency can be physical persons, enterprises or the local city government itself. 
The percentages x% , y%  (or 1% reduction monthly ), z%  , etc are universal constants and parameters of the local currency. 
1. Rules of issuing of the currency and distribution  (Population , assets and volume of activities)
1.1        Every month the network is issuing and is giving a constant amount per each  person-member of the network as survival subside (e.g. 1000 equivalent to   euro). The issued currency has a  date of birth in the computer system. This covers the principle  2 , and that the amount of circulating currency  depends only on  the number of individuals  in the population as backed-up by the intangible assets of productivity of the individuals of the population. Alternatively it depends both on the number of individuals  in the population plus as percentage of the value of   the total assets-wealth of the population both tangible in t% and intangible in  i% and also as percentage of the volume of productive activities (local group GDP) p% . It also  covers the principle 5 of  reduction of inequalities.
1.2        At each indented transaction between two members of the local currency,  x% (e.g. 10%  or even 100%) of its value is done through the electronic local currency (possibly after issuing the necessary local   currency), for the buying side, which is received by the selling side. The issued  currency has a date of birth in the computer system.
1.3        For small collectives of local currency the dependence of the issued currency on the existing wealth does not apply, for reasons of non-available information  and the principle 5. 

2. Rules of   taxation or currency withdrawal from circulation for  asymptotic constant amount of currency

 2.1.     Any amount of local currency  as a kind of automatic tax that does no go to  anyone though, or withdrawal from circulation, decreases its value, by 1% monthly (in general y% monthly) , and in general proportionally in time with the above rate  , according to its  date of birth. The 1% is set so at  the annual rate of decrease is close to the rate  of a low taxation, thus  familiar. Otherwise higher rates, would make the local currency  undesirable to store economic value compared to the old banking currency (e.g. Euro). Furthermore this rule of simple proportionality can be improved  (relative to the principle 5)  to be with an increasing percentage to the size of  the amount of currency according to an agreed table exactly as it is down in   the taxation in the current banking currency (e.g., euro)  This rule of   depletion of the value of the   currency are set so as to have  asymptotically  constant amount of circulating  currency relative to population, and thus      no inflation due to the issuing of new   currency.
2.2. At each transaction, as a kind of automatic tax that does no go to anyone  though, there is a subtraction of the  value, of the transaction in the    local  currency by 12% . which is charged equally as 6% to the buying and   selling sides.  Furthermore this rule of simple proportionality can be improved  (relative to the principle 5)  to be with an increasing percentage to the size of the amount of currency according to an agreed table exactly as it is down in   the taxation in the current banking currency (e.g., euro) This rule  of   withdrawal of currency from circulation  is set so as to have  asymptotically constant amount of circulating currency relative to the volume  of activities, and thus no inflation due to the issuing of new currency.

2.3  Receipts and other accounting documents are produced for every transaction as if it was carried out in full value in the old banking currency. National taxes are paid also in full in the old banking currency, by both sides. 

3. Rules of network administration reward
3.1 The private enterprise that runs the network of the local currency through the internet, should be preferably but not necessarily a not-for-profit organization. The covering of the costs of this organization is through monthly fees, that are z%  (e.g. 10%) in the local currency and 100%-z% in the old banking       currency (e.g. euro). The organization that coordinates the local currency has the same rights and       privileges as any other member organization of the local currency.


4. Rules of correlation of the local currency with the old banking currency.

 4.0 The cross exchange rate of the local electronic currency to the parallel  global banking currency (e.g. euro) is determined either in a semi-fixed rate  adjusted by a political  decision after a voting of all members of the network, or it is left free-floating defined daily by the free market of exchanges.   
4.1     Any person, enterprise, or other organization that becomes a member of the local currency is committed to provide at least z% (e.g. as in Sardex 10%) of its sales, if there is demand for it by other members of the local currency, to be carried out in the local currency. This includes both tangible goods and intangible services and salaries (as long as both the organization and the employee are members of the local currency).
4.2     Any transaction between two members of the local currency must be done in at least x % (e.g. 10%  but also maybe 100% ) of its total value, in the local currency. But there is a veto option for the buyer to have it 100% in the local currency. This veto option of the buyer cannot override the veto option too of the seller not to make available more than z% (e.g. 10% as in the local currency of Sardex ) of its sales in the local non-banking currency.

5. Rules of economic autonomy
   The details of the rules so as to have economic  autonomy as in the principle 8, are left open.





The next rules and principles for local currencies are variations and synthesis of similar rules of the local currency of Woergle in Austria in the decade of 1930, and of the modern  Sardex local currency in Italy.

The rules below define a parallel currency to the banking currency, which is not inflationary, does not have floating  devaluation relative to the banking currency , includes the subsidy for minimum survival, and all taxes are paid in full in the banking currency. 

LOCAL (CITY) GOVERNMENT   CURRENCY WITHIN  THE OLD BANKING CURRENCY

GENERAL PRINCIPLES

(The principles are desired , but they are not all principles  realized by the rules)

1. Principle of   democratic equality

Whenever new currency is issued, it belongs to the collective equally to all. All members are equal with respect to the rules of the currency. The value of the currency corresponds to the productive and wealth creating ability of the people as atoms and collectively. Every situation and intention for productivity by a  person or group of persons that will be good for the collective,  and if the upper limit of percentage of money to the non-money wealth of the society is nor surpassed, is a good reason for issuing of money to create more than 80% equity capital (and not borrowed liability capital) to support the productivity. 

2. Principle of  consistent inheritance of the civilization to all

Every person has the birth right till the end of his life to basic goods and services for good survival . This is done through the minimal subsidy of survival, which defines a non-zero-sum periodic  residual for every person

3. Principle of non-proprietary  money (2nd generation money) and proprietary  money (1st generation money)

Money is only abstract  units of measurement of economic subjective value , therefore it cannot be property of anyone. Currency cannot be bought sold, lent  , or borrowed, on an interest rate.  Instead of owning amounts of currency, there is the almost equivalent concept of  temporary credit from the collective to any member of the collective , for any goods and services that the collective can provide, measured in units of economic value. If the local central authority itself  owns such “money” units, then it means that it is inversely a  temporary credit from the members of the collective to the collective,  for  goods and services that the collective can provide, measured in units of economic value. The value of the currency corresponds to the productive and wealth creating ability of the people as atoms and collectively. 1st generation money has the properties 1) portable 2)for purposes of means of exchange and transactions 2) It  units of value that measure the value of goods 3) It is the store of value. But 2nd generation of money has the properties 1) 2) but not 3) as it is not store of value. Therefore here we are taking about 2nd generation money. 
Modern 1st generation money that are also store of value, most probably should be a fixed basket of goods and services. E.g. the unit could be a basket of goods and services that an average person needs for a decent life during one month.  Non-proprietary money (2nd generation) can be converted to proprietary 1st generation money according to in advance decided and agreed rules. 

4. Principle about  the amount of currency 

The amount of existing currency at each time is related in a monotone increasing way to the a) size of the population b) Volume of activities c) Volume of tangible wealth or assets , locally produced or imported.
For small collectives, that the accounting and evaluation of the assets is difficult the dependence of the amount of currency  on the 3rd factor  of assets is not used.
The rules are such that for constant population, volumes of activity and tangible wealth, the amount of currency is asymptotically constant (so no inflation is created by the rules of the currency itself).For example if only the c) factor of the Volume of tangible wealth or assets, an example of corresponding size of money amount would be 66% (=2/3). 

5. Principle of reduction of inequalities

The collective network puts rules, so as to reduce in a consistent way the financial inequalities.

6. Principle of the central local authority

The  collective network has  privilege as far as issuing, and distribution of the currency compared to the members, only so  as to serve  the totality of the members and the environment.
7. Principle of non-debt society.
The issued currency is circulating from the issuing agency to the collective  mainly (e.g. at least by 4/5 ) with other ways than debt.
8. Principle of economic autonomy
The rules are such that the collective can sustain itself economically for an indefinitely time under normal conditions. This means that exports and imports both for tangible goods and intangible services are not non-balancing in  systematic way  in such amounts that supersede the ability of payments  by the collective.





RULES OF THE NETWORK
The members of the local currency can be physical persons, enterprises and the local city government itself.
The percentages x% , y% , z%  , 1% reduction monthly etc are universal constants and parameters of the local currency. 
1. Rules of issuing and distribution of the currency (Population , assets and volume of activities
1.1        Every month the network is issuing and is giving a constant amount per each  person-member of the network as survival subside (e.g. 1000 equivalent to   euro). The issued currency has a  date of birth in the computer system. This covers the principle  2 , and that the amount of circulating currency  depends only on  the number of individuals  in the population as backed-up by the intangible assets of productivity of the individuals of the population. Alternatively it depends both on the number of individuals  in the population plus as percentage of the value of   the total assets-wealth of the population both tangible in t% and intangible in  i% and also as percentage of the volume of productive activities (local group GDP) p% . It also  covers the principle 5 of  reduction of inequalities.
1.2      But at the same time, when 1.1 is applied the local government is issuing 2   times the same amount for each member, so that half of it serves as the   taxes, corresponding to that person, and the other half, for the ecological   environment and foreign (to the collective) transactions with other collectives.  We notice here that although there is “taxation” for persons there is no for   organizations. As economic organizations reflect also economic inequalities, this means the  local government does not have advantage in the taxes by           higher economic inequalities.
1.3     At each indented transaction between two members of the local currency,  x%  (e.g. 10 %, but it maybe agreed to be 100% also) of its value is done in the local electronic currency (possibly after issuing automatically by the   local government the necessary local currency), for the buying side,  which is received by the selling side. The issued currency has a date of   birth in the computer system.
1.4        For small collectives of local currency the dependence of the issued currency   on the existing wealth does not apply, for reasons of non-available information   and the principle 5.  But if it does apply, then there is a one time initial issuing   and granting of an amount of local currency at the subscription of the member       in the local currency proportional  to the size of its assets with a coefficient  equal for all members.


2. Rules of  currency withdrawal from circulation for  asymptotic constant amount of currency

 2.1.     Any amount of local currency  as a kind of automatic tax that does no go to  anyone though not even to the local government , or withdrawal from  circulation, decreases its value, by 1%   monthly (in general y% monthly) , and in general proportionally in time with the above rate  , according to  its   date of birth. The 1% is set so  the annual rate of decrease is  close to the   rate  of a low taxation, thus familiar. Otherwise higher   rates,  would make the local  currency  undesirable to store economic value compared to the old banking      currency (e.g. Euro). Furthermore  this rule of simple proportionality can be improved (relative to the principle 5)  to be with an increasing percentage to the size of  the amount of  currency according to an agreed table exactly as it is down in  the taxation in the current banking currency (e.g., euro)  This rule of      depletion of the value of the  currency are set so as to have asymptotically  constant amount of circulating      currency relative to population, and thus  no inflation due to the issuing of new  currency.
2.2. At each transaction, as a kind of automatic tax that does no go to anyone though, there is a subtraction of the  part of the value, of the transaction in the    local  currency by 12% . which is charged equally as 6% to the buying and selling sides.  Furthermore this rule of simple proportionality can be improved           (relative to the principle 5)  to be with an increasing percentage to the size of the amount of currency according to an agreed table exactly as it is down in  the taxation in the current banking currency (e.g., euro This rule  of   withdrawal of currency from circulation  is set so as to have  asymptotically constant amount of circulating currency relative to the volume  of activities, and thus no inflation due to the issuing of new currency.
2.3  Receipts and other accounting documents are produced for every transaction as if it was carried out in full value in the old banking currency. National taxes are paid also in full in the old banking currency, by both sides. 

3. Rules of authority responsibilities and economics
3.1 The local (city)  that runs the network of the local currency through the  internet, acts as a  not-for-profit organization. The accumulated funds in the local currency , by the “taxation” (rule 1.2) are utilized exclusively for the common good, of the collective, and only after appropriate direct-democratic      voting (through the internet) and financial auditing, of the members to the administrators of the local (city) government.



4. Rules of correlation of the local currency with the old banking currency.

4.0 The cross exchange rate of the local electronic currency to the parallel  global banking currency (e.g. euro) is determined either in a semi-fixed rate  adjusted by a political  decision after a voting of all members of the network, or it is left free-floating defined daily by the free market of exchanges.   
4.1     Any person, enterprise, or other organization that becomes a member of the local currency is committed to provide at least z%  (e.g. 10% as in Sardex) of its sales, if there is demand for it, by other members of the local currency, to be carried out in the local currency. This includes both tangible goods and intangible services and salaries (as long as both the organization and the employee are members of the local currency).
4.2     Any transaction between two members of the local currency must be done in at least x% of its total value, in the local currency (e.g. 10% or 100%) . But there is a veto option for the member-buyer to have it 100% in the local currency. This veto option of the buyer cannot override the veto option too of the seller not to make available more than z% (e.g. 10% as in Sardex) of its sales in the local non-banking currency.

5. Rules of economic autonomy
   The details of the rules so as to have economic  autonomy as in the principle 8,   are left open.








Speculating about how the rest of the financial system, should be so as to function in a more healthy , stable and solvent way, here is an extract from a blog about ecological communities and their "internal macroeconomics". From these remarks we can easily deduce how the global economic system was initially intented to be.


...................................................................................................................................................................

Here are some guidlines for the internal macro-economics and finances  of eco-communities and federation of communities. Compared to the current in the societies they are renormalized, without the known pathogenesis.


1)    The economic structure is essentially a power structure from human to humans rather than from humans to the physical reality.
2)     In a distant future development of individuals and society, there would be no need of power structures, besides the individual and the society as a whole. Neither it would be necessary to utilize money at all. But this is not applicable in a current state of evolution, where many individuals have strong desire and will to apply power over other people (or have other people apply power to them). If in the current state of evolution an economic system would allow only the power of the individual and the public state, without any intermediate private sector, it would occur, totalitarian and tyrannical phenomena  similar to those in the communistic Soviet Union and China.
3)     It is therefore almost unavoidable that intermediate power structures (“private sector”) must keep the balance to avoid tyranny. The organization units of this intermediate structure are shaped because of a) the individuals strong desire of power over other people b) through the “free market” game of “private property” and c) after the social law of universal attraction, that leads to a Pareto distribution of  volumes of power.
4)     In the current system to regulate this “private sector” power structure can be done through two tools a) money b) voting. (Both are "technologies of transfer and propagation of rights of power from humans over other humans and objects", which create power structures. But the voting tool is a bit more advanced, it is used mainly by the public sector, as it involves principles, expression, etc versus mainly only action that money involves).
5)     In a future more advanced evolution the regulation and creation of "private sector" power structures, can be done entirely through the tool of voting, while money may have been entirely eliminated.
6)     A “private sector” with intense power (economic) inequalities creates unhappiness, crimes, and violence. Any improvement from the current state to more evolved would involve lessening the power (or economic) inequalities.





A. Morality renormalization at the scale of the individual and the household.1) Money is essentially destined to be exchanged with objects mainly, not so much with abstract intangible services, or other abstract values as "value of an enterprise" or "value of the whole of the community" etc. The more advanced the community , the more it will refrain from buying even human labor, as it is nothing else than soft-slavery. The human soul is involved in the human labor, and human existence in personal time. The abstract-use of money occurs not at the scale of household, but at the scale of enterprise (surplus wealth=capital=operational power, buy an enterprise) , domestic economy (buy.....a nation), and global economy (buy....the planet). The more advanced and uniform the community the less the use of money, the more the demonetisation. The abstract power of money (from the enterprise and above,surplus wealth=capital=operational power) may be substituted with the political power of voting. The more advanced the community, the more the economic interplay is shifted from win-lose or lose-win, to win-win or lose-lose. The more advanced the community, the less the financial differences.

2) There is a minimum household wealth that everyone has the right from birth till death. And there is a maximum household  wealth (which is also protected from any bankruptcy) . Any surplus wealth above the maximum household wealth, can be used for enterprises and business but not for the private household. Surplus wealth is  a weaker form of ownership compared to household wealth.

B. Monetary system macroeconomic renormalization
3) If the community or federation of communities is to issue  their own currency, then no private group can have this privilege other than the collective of the communities. There must be an reasonable frequent inventory of the objects of coins and paper-money, (not financial value) so that each time the communities "print" new money, to replenish from the diffusion to external social environment or for other reason (increase of the population of the community etc) ,  only a limited percentage of it can be lent (e.g. <20%). The newly "printed" money is to circulate mainly  through investments, subsidies, payments etc. The above rules garantee that the currency will not be led to non-solvent over-debt by printing and lending 100% of the printed money by any private subgroup. The currency is issued by the community with the following rules: For each person it is printed every month 3 equal amounts of currency e.g. 1,000+1,000+1,000=3,000. The first 1,000 it is for the unconditional monthly income for the person, the second 1,000 for the community, and the 3rd 1,000 for the environment and the rest of the world. Each year the currency loses 50% of its value ( about 5% monthly or 0.2% daily). We call this rule the gradido rule. 

3.1) There is a minimum size and a maximum size for a community that issues its own currency. The main reason is so as to avoid a big size difference from the wealth of each individual and the common wealth of the community, so as to avoid phenomena of totalitarianism as those in the ex Soviet Union.  This is also in accordance with the wisdom of the ancient Greek civilization, that considered cities not larger than a maximum size, as a basic feature of rational, balanced ensouled, and democratic civilization as contrasted to monstrous size cities, kingdoms, and steep Pareto distributions of wealth distribution that eventually create crime and violence. 

4) No classical banking business based on fractional reserve rules, is to occur with the currency of the communities. The only "banking business" intended (called here safe-keepers) is the historic initial role of the banks, in other words , individuals or groups may give their valuables and money, for safe keeping, and for this they must pay the safe-keepers reasonable fees. The safe-keepers do not have the right to lend any of the valuables that are deposited to them. The absence of the greedy banking  fractional reserve rule eliminates the classical instabilities of the financial system. As enterprises issue public-co-ownership (shares) and public-borrowing (bonds) the role of banks for public lending of enterprises is reduntant. The lending compared to investments is kept low (e.g. lending=0.25*investments) and it is always with zero interest rate. This guarantees that money circulates perpetually compatible with a sustainable permaculture, and not exponentially which is incompatible with natural recourses long term behaviour.   
C. Enterprise, microeconomic renormalization.
5) Enterprises in the communities may be shaped, but to avoid the classical psychological and financial alienation, the shareholders mainly are the employees of the enterprise, External share-owners may exist up to e.g. 20% of the equity, and have less rights compared to internal shareholders.
Even better if all enterprises are non-profit type of enterprises.
The liabilities of the enterprises are limited always to less than 25%.  The liabilities plus the external owners cannot be in total more than the 33% of the assets.

5.1) Enterprises are of 3 sizes. Small, Medium and Large.
For medium and large size enterprises, in order to avoid decisional domination of a small group of shareholders to the rest, a quantitative rule, prohibits of individuals having significantly larger percentages from the rest of the shareholders.  The above rules make sure that the legal owners of an enterprise are also the real financial owners of it, so alienation is avoided. For the medium and large size enterprise to function in a democratic way (like democratic state rather than a totalitarian oligarchic state) the decision of a manager to take a position must be a double confidence election : Both from the higher rank managers, and from the lower rank employees. 
For medium and large size enterprises, the decisions to elect a board is not taken through voting  only by the owners, but through voting with appropriate weights of all the stakeholders (much as is done the voting and elections in Universities) In other words, the owners, the emploees, appropriate samples of suppliers, and customers, and agents of the public state vote too. 
If a medium size enterprise grows to a large size enterprise, then automatically,  shares from the private owners (prefered of week ownership not strong ownership, see 2)) are transferred to the public state, as a type of donation, so that the public state owns at least 51% of he shares.


5.2) The totall accumulative assets of the private sector, P, cannot become larger than m-times the total assest of the public state. Or converselly the public state cannot become less than a particular size compared to the private sector.

5.3) The enterprises have also the right to issue currency as the public state has. If A is the amount that the public state issues currency for each person in 3 amounts (A,A,A) , and if the ratio of the population of the enterprise, to the population of the public state is λ=enterprise population/public state population, then the enterprise issues every month for each person of the enterprise (employees, owners etc) three amounts (λB,λB,λB) to be used respectively as 1) persons salary, b) enterprise needs c) the environment and the rest of the world.  It may be that A=B, but it maybe that B not equal to A, if we want to depend the liquidity not only on the number of persons but also on the value of the production. This currency too which is identical with the currency issued by the public state, loses its value by 50% every year so that we have asymptotically stable amount of currency and no creeping inflation.

These rules are intended to a) give sufficient liquidity of money to the enterprises so that they do not resort to borrowing, b) decrease the economic inequalities c) make sure that no  private sector enterprise becomes stronger than the public state.


D. Stock exchanges and "free market"  macroeconoic renormalization.
6) Stock-Exchange phenomena may occur between enterprises, but as the historic term signifies, they are for the purpose of creating stable portfolios of business for each enterprise. (exchange of inventories)
To protect this original intention the next rule applies: Each share (security) is bought or sold only at the fixed accounting value. This value never changes or fluctuates, Thus any one buying shares cannot lose , only not gain(he will buy them and a price and will sell them at the same prices). What is expected to gain is the dividend from the operational profits of the business. The above rules make sure that enterprises are open up to some degree to the public, but at the same time there is no risky game that makes the majority losers and a very small minority winners. 

E. Cross currencies exchange rates global renormalization.
7) If different communities issue different currencies within a federation , their relative cross exchange rates is always equal to 1. This rule avoids  unfair abrupt devaluations or overvaluations simply from a minor demand supply interplay, to the currencies of whole communities.

Final remark: The previous rules of renormalization, restrictive as may be, will have the effect to eliminate over-debt, economic bubbles, and instability. But they will not eliminate the economic inequalities, as this is the result of a) The "hunger" from people to have power and dominate other people, b)The existence of the game of private property c) a "free market" even restrictive as it is set-up as above. 
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