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Re: <nettime> dollars & donuts
Michael Linton on Wed, 23 Jan 2002 08:18:48 +0100 (CET)

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Re: <nettime> dollars & donuts

On January 21, 2002 08:30 am, Doug Henwood wrote:
> Michael Linton wrote:
> >The money illusion.  Perhaps if you specify just what you consider that to
> > be we can discover whether "LETS people" are so elevated.  Please define,
> This is a naivete affected for rhetorical purposes, right? 

Not at all - I have a genuine ignorance (it was not my fortune to be a 
trained economist) and was further confused by a web search that found three 
distinctly different accounts of the "money illusion" and several associated 
variants - none of which seemed to relate in the least to open money.

>......Surely someone promoting a scheme for monetary reform 

In point of fact, open money is absolutely NOT about monetary reform - that's 
far too ambitious a task for us.  The introduction of complementary 
currencies is however quite practical.

>............would be familiar with
> the term. On the off chance the question is serious, 

Entirely serious.  I asked because you weren't specific and I wanted to know 
what you meant, and maybe others did too.

>...............the money
> illusion is a term in economics, coined I believe by Irving Fisher,
> describing the alleged propensity to mistake a nominal change for a
> real one. Say if inflation is running at 5%, and you get a 5% raise,
> your real wage increase is 0%, but it may still feel like a gain,
> just because there are bigger numbers printed on your paycheck.

There's nothing in our world - sites, publications, projects, programs, 
designs, software (free) and/or history/records that relates to this 

> Of course I was using it figuratively - that by changing the form of
> money you're somehow changing underlying social relations. 

This is rather different from Fisher's formulation, but at least it's now 
clear what you are saying.  And, yes, you have indeed identified the core of 
the matter - we do believe that the form of money matters, that here as most 
other realms of reality, form and function are related.  That's our position, 
indeed the kernel of the open money idea set.  

We have observed - rocks are hard, water's wet, time flies, gravity sucks and 
money moves.  So far we have only found two ways it moves, and two forms it 

One form - hard money, legal tender, asset backed money etc - moves THROUGH 
community.  Another form - soft money, mutual credit networks - moves AROUND 
within community. That's all we can say for sure about distinctions of form 
and function. There's in-and-out, and there's round-and-round.  Quite 

Our experience over 20 years now in a wide range of economies is that the two 
forms are radically different in the social relations of the exchange they 

However, the conventional wisdom of economists holds that the form of money 
has nothing to do with its function.   Isn't it economists who lie awake at 
night wondering whether something that works in practice can be made to work 
in theory?

Please see www.openmoney.org/fiwg/brief and www.openmoney.org/way/dif for 
some leads on this.  


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