re/ development model

[Richard Moore]

Greetings,

So far, not one person has given feedback on the development model. I suppose everyone assumes someone else will do it. Or perhaps everyone is too busy. Or perhaps reading is in progress, in which case sorry for bothering you.

In any case, it isn't necessary to give a "knowledgeable critique". I'd be happy with miscellaneous comments, like such-and-such makes sense or doesn't, or why did you do this?, or whatever. 

It turns out that the details of the coupons, the local currency, isn't really the central part of the model. The important part, the part that would be a new contribution, are the nine development stages, what is being done in each stage. Do you think that the discounts offered, for example, would provide the intended incentives to participate? Do the stages make sense in terms of achieving sustainability? Does the emphasis on the Commons make sense? Are worker co-operatives a good way to organize local businesses?

I went into detail with the coupons, because I was trying to minimize taxes. It might work, but one never knows with tax collectors. So really any local currency could be used in the model, and it wouldn't change the development process. The various discounts and incentives would simply be characterized differently, but would amount to the same thing.

hoping to hear from you,

richard

http://groups.google.com/group/credit-bank-model/files

[Nancy Dennis]

On Aug 2, 4:40 am, Richard Moore <r...@quaylargo.com> wrote:

> it isn't necessary to give a "knowledgeable critique".  
> I'd be happy with miscellaneous comments, like such-and-such makes  
> sense or doesn't, or why did you do this?, or whatever.
>

Dear Richard,

I’m glad you are not waiting for a "knowledgeable critique" as you
certainly won’t get one from me. This is a dense chunk of material
that has required several readings to get my mind around. Normally, I
experience myself as having above-average ability to comprehend
abstract material-but economics may be an exception. Your Co-op Coupon
Model has certainly challenged that ability.

However, I’m very motivated to figure it out because of my growing
understanding of the extent to which economic relationships shape the
choices of individual lives and constrain the ability even of those
who wish to choose a low-impact, healing, and cooperative lifestyle
from taking effective action. As I and many of your other readers have
said before, the time for action is here. I so much appreciation the
insight of your introduction as to why the multiple good ideas out
there have not yet gained much traction. Since solutions must come
from the bottom up, we must figure out how to motivate large numbers
of people to change their behavior.

Right off, I want you to know that most of the questions I ask are
motivated by a desire to really understand this proposal because
unless I understand it and have confidence that it could really work,
I can’t talk about it to others. Unless I can present the idea to
others, I’ll likely never experience the manifestation of it. In other
words, I really want this (or some further refined version of it) to
work because I like the sound of it, the process, and the final
result. I don’t intend any of the questions or comments as a
criticism.

Just to put my remarks in context, I jumped in with the July 27th
version and have not read the previous material. I’ll start with the
detailed observations and questions that popped into my mind as I was
reading (and re-reading) and finish with my more global concerns.

In the Overview of the development model section, you describe “The
Community Development Cooperative” has having a board on which Co-op
members can serve only once for six months. Why? Wouldn’t you one day
run out of members to serve (unless you are talking about a very large
community)? Initially, I would expect to have difficulty finding
enough human energy to keep the board going without this kind of
limit. You could be right for reasons I haven’t thought of. So I’d
like to know the purpose of this restriction.

In the description of Co-op bonds, you say that the sponsors will not
be repaid until the final stage. Later in the text, you describe the
repayment as beginning in the 7th stage. But in either case, this
feels to me like a big disincentive for sponsors because these stages
could take many years to work through. Perhaps a compromise position
could be to begin small repayments in Stage 4 when the system begins
to generate a surplus. As the community moved through the subsequent
Stages, the repayments would become bigger.

A beginning entity you suggest for Stage 0 is “Energy utility”. In
every state of the US in which I’ve lived, any company providing
energy is subject to regulation by a state utilities commission and
normally there’s only one for any given area. Are you suggesting that
the Co-op go into competition with whoever is already providing energy
in the area?

Another beginning entity is “Child-care service”, which, you say,
should “be provided free to Co-op workers.” Does this not
automatically mean that child-care workers would be underpaid? That is
the current reality and I don’t think it should be perpetuated. If
not, then the community will require sponsors with collective deep
pockets. I have a similar question about the “Transport service” that
provides “free door-to-door commute service for all Co-op workers”.
What a great benefit! But where does the money for gasoline and
maintenance come from?

Stage 0 is over “when the new entities have grown as much as they can
for the time being.” How is this measured, or how can you tell when
you’ve arrived at this condition. You say that at this point “Co-op
membership should be widespread”. What percentage of the population
would you judge as “widespread” – 50%? 60%? 75%? Same question for the
end of Stage 2: “most people in the community are Co-op members”. 75%?
90%? I’m just trying to get an idea about what miracle of unanimity is
needed to make this work. Where is the tipping point?

In Stage 4, you talk about the desirability of promoting this
development model among other communities. Do you see this as a
requirement for making the model work and specifically, is this
necessary before advancing to the next stage? Part of generating
motivation for sponsors is presenting a plan that looks doable. If the
plan requires convincing many others who don’t even live in the same
place to make it work, I would personally find that a challenge to my
faith.

In Stage 6, you say it’s now time to “systematically
reduce . . .dependence on unsustainable consumption.” I hope the key
word here is “systematically” and that you are not implying that no
thought has been given in the previous stages to “reducing the
community’s use of energy and other resources.” Reducing waste is
usually the first step in any plan to get sustainable.

I like your distinction between dependencies and indulgences and your
list of the basic necessities. But the whole of what you say under
Food, Water, and Energy should, in my view, begin in Stage 0. In my
own life, I would not be waiting till Stage 6 to begin working on all
these areas and think others would be wise to do the same.

You make several references to the inflationary pressure created when
coupons are trading widely. I need some explanation as to why. Perhaps
this is because of my low comprehension of economic principles. But I
decided to bring it up because in reading Thomas Greco’s 2001 book
Money: Understanding and Creating Alternatives to Legal Tender, I
picked up the idea that as long as the volume of currency is
sufficient to facilitate the volume of transactions people want to
make, inflation won’t happen. Perhaps there is an essential difference
between the local currencies Greco is talking about the coupons you
are proposing. But if so, I need to understand that difference in
order to muster the required confidence—especially since the cure to
inflation in your model doesn’t come till Stage 7 and requires the
surplus of local coupons to be absorbed by import and travel
opportunities created by networking with outside communities.
Although, I wondered when reading about the Stage 8 plan to liberate
time for enjoying prosperity if that couldn’t be the way to reduce
inflationary pressure. When you have too many coupons, and the
community can’t think of any needed public works, pay members a
dividend that’s tied to working less. I think you could do this
without any other communities on board.

By the way, I was happy to see that Greco responded to your Model,
even if it was only to ask if you’ve read his latest. I’m glad to know
he’s written another book and I shall read it. But I would love to
know what he thinks of your plan.

Throughout my reading, I repeatedly wondered what size community you
are imagining. In the discussion of Transport on p. 18, I learn that
your community is bigger than a neighborhood-although, on p. 6 you say
the community is small enough that people know each other well enough
that forgeries and bad checks would not be a problem. Community is a
somewhat amorphous word in that it can refer to groups of widely
differing sizes. But it seems to me that at some level, size is
important. Did you ever read Kirkpatrick Sale's tome Human Scale? I’m
wondering what the upper and lower limits are for the size of a
community that could be successfully transformed by a Community
Development Cooperative.

Generally, in smaller communities I imagine I have a greater chance of
being able to participate effectively. Of course, one of your main
goals is to build community in which people do feel empowered. But,
I’m talking about getting there from here-where even in a community of
5,000 to 7000 people, developers and others with big money seem to
have outsized power. So when it comes time to convince a particular
community to adopt this model, the core group of “local community-
minded people” (and potential sponsors!) will need to feel some
confidence that they can implement the plan without getting squished
by powerful interests with more selfish goals.

One of the first entities you suggest in Stage 0 is an energy
utility. And apparently, this would not be a simple co-op of
homeowners buying enough wind power to run their households because
you say “the utility can arrange to buy energy on a volume basis and
remarket it in the community at break-even prices.” How big does a
community have to be to provide sufficient volume?

Your description of the later stages of Community Development left me
struggling to picture the relationship between the Co-op and already
established local government. For example, in Stage 6, one of the
possibilities for Transport is an “Amsterdam-style road layout with
separate lanes for pedestrians, bicycles, private vehicles, & public
transport.” Even a very large Co-op could not undertake such a
sweeping design change without going through local government. An
example from Stage 7 is the requirement that “goods will already have
committed buyers before they’re shipped” long distances. This could be
a voluntary policy; but otherwise it would have to be a governmental
mandate, wouldn’t it? Stage 8 involves developing the community
commons, all of the example of which are usually provided by local
government (public parks, libraries, sidewalks, fire departments).

Finally at the end, you describe the merging of the Co-op and local
government that can take place “when the overwhelming majority of the
community is actively involved, and a workable consensus process
begins to emerge.” At that point, “the Co-op will be able to elect a
slate of candidates to all local governmental positions.” Once this
happens, all the items from earlier stages could easily be
accomplished. But until then, I can see a lot of potential for
conflict between the goals of government (i.e. those making money from
the system as it is) and the goals of the Community Development
Cooperative. For me, the description of these later stages suffers
from these unclear boundaries.

I’ll end with a direct examination of your questions:
1. Do you think that the discounts offered, for example, would provide

the intended incentives
to participate?

Yes, provided there exist right away an ample array of goods and
services on which to use them. The problem with many existing “local
currencies” is that they are only good for services like haircuts,
lawn mowing, piano lessons – stuff I never spend money on anyway.

2. Do the stages make sense in terms of achieving sustainability? Not
completely, for the reasons discussed above.

3. Does the emphasis on the Commons make sense? Yes!

4. Are worker co-operatives a good way to organize local businesses?
Yes! I love this idea. Have you read about the Mondragon cooperatives
in the Basque region of Spain?

I look forward to the progress of your proposal.
Nancy Dennis

[Richard Moore]

Hi Nancy,

Many thanks for your comments, the first substantive response I've gotten. (Not to dismiss other's responses, but Nancy's is the first to delve into the details of the model.)

Nancy Dennis wrote:

Dear Richard,
I’m glad you are not waiting for a "knowledgeable critique" as you
certainly won’t get one from me. This is a dense chunk of material
that has required several readings to get my mind around. Normally, I
experience myself as having above-average ability to comprehend
abstract material-but economics may be an exception. Your Co-op Coupon
Model has certainly challenged that ability.

Thanks for sharing that. It helps me understand why it's been hard to get feedback. And thanks for putting in the effort!

However, I’m very motivated to figure it out because of my growing
understanding of the extent to which economic relationships shape the
choices of individual lives and constrain the ability even of those
who wish to choose a low-impact, healing, and cooperative lifestyle
from taking effective action. As I and many of your other readers have
said before, the time for action is here. I so much appreciation the
insight of your introduction as to why the multiple good ideas out
there have not yet gained much traction. Since solutions must come
from the bottom up, we must figure out how to motivate large numbers
of people to change their behavior.

This is perhaps a side topic, but I have a problem with the notion of individuals 'changing their behavior'. We can't transform the system by individual actions, and perhaps that's not really what you mean. A bunch of people waiting at a non-existent station won't create a railroad. Our solutions need to be collective solutions. I've come to see the keyword in all of this as collaboration. Working together, doing projects together. The image of a barn-raising. Depending on one another to do their part, creation of team spirit. Transformation itself is a project, with a beginning, middle, and end.

Right off, I want you to know that most of the questions I ask are
motivated by a desire to really understand this proposal because
unless I understand it and have confidence that it could really work,
I can’t talk about it to others. Unless I can present the idea to
others, I’ll likely never experience the manifestation of it. In other
words, I really want this (or some further refined version of it) to
work because I like the sound of it, the process, and the final
result. I don’t intend any of the questions or comments as a
criticism.

Well, criticism is OK too, but thanks for the friendly approach.

Just to put my remarks in context, I jumped in with the July 27th
version and have not read the previous material. I’ll start with the
detailed observations and questions that popped into my mind as I was
reading (and re-reading) and finish with my more global concerns.

Glad you didn't read the earlier versions!

In the Overview of the development model section, you describe “The
Community Development Cooperative” has having a board on which Co-op
members can serve only once for six months. Why? Wouldn’t you one day
run out of members to serve (unless you are talking about a very large
community)? Initially, I would expect to have difficulty finding
enough human energy to keep the board going without this kind of
limit. You could be right for reasons I haven’t thought of.  So I’d
like to know the purpose of this restriction.

I'm assuming we have at least a few thousand people in the community, so I'm thinking we won't run out of people to be on the board. At the beginning, when general community interest in the project is likely to be minimal, the board has a leadership role to play, and the investor board members will be wanting to shepherd the project along. But as we get past the first few stages, the guidance for the project will be coming from the community. Indeed, the real purpose of the project, the 'smuggled donkey', is the development of the community's consensus process. 

The board becomes an administrative agency, not a policy-making body or a government-like body. Rotating people through it helps ensure we don't get some kind of politician class emerging. It's all about direct democracy. Once the community starts directing things, the whole project is likely to change and evolve. All options are open then. My goal with this model, as with my book, is to try to show that there is at least one pass through the mountains. Once better people do a survey, I'm sure they'll find better passes.

In the description of Co-op bonds, you say that the sponsors will not
be repaid until the final stage. Later in the text, you describe the
repayment as beginning in the 7th stage. But in either case, this
feels to me like a big disincentive for sponsors because these stages
could take many years to work through. Perhaps a compromise position
could be to begin small repayments in Stage 4 when the system begins
to generate a surplus. As the community moved through the subsequent
Stages, the repayments would become bigger.

You could be right. This is certainly open for discussion. Let me say something about the theory behind the model. The theory is about using available resources at each stage in the most productive way. Up until stage 7, there are things that need to be done that require resources. If we start subtracting funding before stage 7, then the sponsors might as well have invested less in the first place. What the point of putting money in, and then taking it out when it's still needed? 

Basically, the sponsors need to be putting in money that they don't need to get back. Money they're willing to kiss goodbye if the project doesn't succeed. But of course they're not going to do that unless they really believe in the project, and understand why and how it can succeed, and unless they have the energy to help make it succeed. 

One thing we could consider is a broader base of donors. Instead of a few folks with many thousands to risk, maybe there'd be a way to get lots of people to put in a few hundred. That creates new problems, but worth discussing.

A beginning entity you suggest for Stage 0 is “Energy utility”. In
every state of the US in which I’ve lived, any company providing
energy is subject to regulation by a state utilities commission and
normally there’s only one for any given area. Are you suggesting that
the Co-op go into competition with whoever is already providing energy
in the area?

I'm thinking of two examples. One is Palo Alto. Many years ago, some local citizens got active and convinced the city to run its own utilities. So the city buys its electricity wholesale from PG&E, and Palo Alto residents pay less for their electricity than nearby PG&E customers pay. The other example is what's happening with wind power here in Ireland, which is probably the same as other places. The wind-power folks put their power on the grid, and then they are allowed to market it themselves to end users. So I'm hoping that an arrangement similar to one of those might make sense. But it would need to be researched and your reservations are quite valid.

Another beginning entity is “Child-care service”, which, you say,
should “be provided free to Co-op workers.” Does this not
automatically mean that child-care workers would be underpaid? That is
the current reality and I don’t think it should be perpetuated. If
not, then the community will require sponsors with collective deep
pockets. I have a similar question about the “Transport service” that
provides “free door-to-door commute service for all Co-op workers”.
What a great benefit! But where does the money for gasoline and
maintenance come from?

Well, there are no numbers in the model. No spreadsheets have been developed. These specific proposals need to be seen as brainstorming ideas.

My thought on the transport service, for example, is that the overhead of providing regularly-scheduled commute support for co-op members would probably be minimal in the context of the overall transport service, and would be covered by slightly higher prices for the service generally. It's a beginning of the Commons, and I like the idea of doing things on a non-exchange basis within the Co-op as much as makes sense. 

It seems to me that a communal approach works best for some things, and a market approach works best for others. 

Stage 0 is over “when the new entities have grown as much as they can
for the time being.” How is this measured, or how can you tell when
you’ve arrived at this condition.

It's just a matter of reaching a plateau, where growth levels off. 

You say that at this point “Co-op
membership should be widespread”. What percentage of the population
would you judge as “widespread” – 50%? 60%? 75%? Same question for the
end of Stage 2: “most people in the community are Co-op members”. 75%?
90%? I’m just trying to get an idea about what miracle of unanimity is
needed to make this work. Where is the tipping point?

We don't really know in advance where the tipping point will be, or the percentages. And it's  a multi-dimensional situation. There are the economic benefits, that hopefully keep building, and there's the spirit of community that will hopefully emerge. It's conceivable the spirit of community could emerge early, and that could accelerate the whole process considerably. 

In Stage 4, you talk about the desirability of promoting this
development model among other communities. Do you see this as a
requirement for making the model work and specifically, is this
necessary before advancing to the next stage? Part of generating
motivation for sponsors is presenting a plan that looks doable. If the
plan requires convincing many others who don’t even live in the same
place to make it work, I would personally find that a challenge to my
faith.

I don't think the project would fail if 'evangelism' fails. I think there are enough localization movements and Transition Towns that good trading partners could be found, and networks could be developed. I think evangelism is a good idea, however, for two reasons. First, the real goal is to transform society, not just to create one sustainable community. Second, by Stage 4, we wouldn't be evangelizing a document, but a working model, a community that has achieved real results. We could hold a conference, invite people from all the localization movements, show them around the community, and have discussions and sessions with them. We'd know a lot more then than we know now.

In Stage 6, you say it’s now time to “systematically
reduce . . .dependence on unsustainable consumption.” I hope the key
word here is “systematically” and that you are not implying that no
thought has been given in the previous stages to “reducing the
community’s use of energy and other resources.” Reducing waste is
usually the first step in any plan to get sustainable.

You are right, the key word is systematically. From the beginning, there's always an eye on sustainability. But to really go for sustainability, there's got to be very wide support in the community. We need to go through the earlier stages in order to develop that level of support.

I like your distinction between dependencies and indulgences and your
list of the basic necessities. But the whole of what you say under
Food, Water, and Energy should, in my view, begin in Stage 0. In my
own life, I would not be waiting till Stage 6 to begin working on all
these areas and think others would be wise to do the same.

Good thinking. From the very beginning, we'd want to be telling people about the principles of Transition Towns, encourage home gardens, buying local, etc. The more people and groups undertake their own initiatives the better. But to ask the community as a whole to do these things as a collective project, we need the widespread support I mentioned above.

You make several references to the inflationary pressure created when
coupons are trading widely. I need some explanation as to why. Perhaps
this is because of my low comprehension of economic principles. But I
decided to bring it up because in reading Thomas Greco’s 2001 book
Money: Understanding and Creating Alternatives to Legal Tender, I
picked up the idea that as long as the volume of currency is
sufficient to facilitate the volume of transactions people want to
make, inflation won’t happen.

Right, but if there's quite a bit more currency in circulation than there are things to buy, then prices would tend to bid upwards, which is inflation. The idea is to keep things in balance, and specific measures are taken in each stage to achieve balance.

Perhaps there is an essential difference
between the local currencies Greco is talking about the coupons you
are proposing. But if so, I need to understand that difference in
order to muster the required confidence—especially since the cure to
inflation in your model doesn’t come till Stage 7

There hasn't been inflation all the way to stage 7. Inflation pops up in various stages, and is handled in each stage in some appropriate way. Each stage has some set of problems, either shortage of dollars, inflation, deflation, not enough participation, or whatever. Each stage is designed to deal with its own set of problems so that we can move on from there. 

and requires the
surplus of local coupons to be absorbed by import and travel
opportunities created by networking with outside communities.

Right, the network will make more things available to buy, which balances the excess currency. I'm guessing about what people would want to buy, when I mention travel, but 'imports' is very general and covers whatever they'd want to buy.

Although, I wondered when reading about the Stage 8 plan to liberate
time for enjoying prosperity if that couldn’t be the way to reduce
inflationary pressure. When you have too many coupons, and the
community can’t think of any needed public works, pay members a
dividend that’s tied to working less. I think you could do this
without any other communities on board.

I don't think we need to require people to work less. If people are getting dividends, and there's surplus income in the community, and if we make it easy for people to work part time or to job share, then I think people would be more than happy to work less and do more of other things. Part of our so-called "work ethic" comes from fear and insecurity about the future. If we've got a stable and productive economy, people will feel more confident about taking time off, and coming back to work when they get low on funds.

By the way, I was happy to see that Greco responded to your Model,
even if it was only to ask if you’ve read his latest. I’m glad to know
he’s written another book and I shall read it. But I would love to
know what he thinks of your plan.

Me too!

Throughout my reading, I repeatedly wondered what size community you
are imagining. In the discussion of Transport on p. 18, I learn that
your community is bigger than a neighborhood-although, on p. 6 you say
the community is small enough that people know each other well enough
that forgeries and bad checks would not be a problem. Community is a
somewhat amorphous word in that it can refer to groups of widely
differing sizes. But it seems to me that at some level, size is
important. Did you ever read Kirkpatrick Sale's tome Human Scale? I’m
wondering what the upper and lower limits are for the size of a
community that could be successfully transformed by a Community
Development Cooperative.

Ah, another Kirkpatrick Sale fan! I read Breakdown of Nations, and it was a breath of fresh air, one of those pivotal insights that make a difference in our thinking. On a par almost with Daniel Quinn. Scale is central to everything. 

For this project, I'd guess a few thousand, say 2,000-20,000, as a general range. It's not that everyone knows everyone else, but that the community is small enough that good or bad reputations would become known in the community, and that word-of-mouth is an important element of community communication. Once you get to big-city size, then there's too much anonymity. 

Generally, in smaller communities I imagine I have a greater chance of
being able to participate effectively. Of course, one of your main
goals is to build community in which people do feel empowered. But,
I’m talking about getting there from here-where even in a community of
5,000 to 7000 people, developers and others with big money seem to
have outsized power. So when it comes time to convince a particular
community to adopt this model, the core group of “local community-
minded people” (and potential sponsors!) will need to feel some
confidence that they can implement the plan without getting squished
by powerful interests with more selfish goals.

Fortunately, it's not necessary to get general community buy-in on the project at the beginning. If it were, then  there would be opposition groups, and we'd have a very difficult situation. One of the advantages of a new project like this, is that established interests aren't likely to take it very seriously until it already has momentum going.

One of the first entities you suggest in Stage 0 is an energy
utility. And apparently, this would not be a simple co-op of
homeowners buying enough wind power to run their households because
you say “the utility can arrange to buy energy on a volume basis and
remarket it in the community at break-even prices.” How big does a
community have to be to provide sufficient volume?

We'd have to look at the specific case, if people in a community were considering the project. It depends on the regulations in force, pricing policies of energy providers, etc.

Your description of the later stages of Community Development left me
struggling to picture the relationship between the Co-op and already

established local government...

I'd say that by about Stage 4 or 5, you'd be able to bring in a friendly local government that would be cooperating with the project. 

I’ll end with a direct examination of your questions:
1. Do you think that the discounts offered, for example, would provide
the intended incentives
to participate?
Yes, provided there exist right away an ample array of goods and
services on which to use them. The problem with many existing “local
currencies” is that they are only good for services like haircuts,
lawn mowing, piano lessons – stuff I never spend money on anyway.

Either 'ample array', or 'a few essentials', I think. Stage 0 aims for "entities that provide basic goods and services that will be widely used in the community."

2. Do the stages make sense in terms of achieving sustainability?  Not
completely, for the reasons discussed above.

Hope somewhat clarified now. 

3. Does the emphasis on the Commons make sense?  Yes!

cool.

4. Are worker co-operatives a good way to organize local businesses?
Yes! I love this idea. Have you read about the Mondragon cooperatives
in the Basque region of Spain?

Yes. It'd be nice to be in touch with someone who's very knowledgeable about Mondragon.

thanks again,

richard

[John Lowry]

I think "motivation" arises from the recognition of a probable strategy for
getting what you want. Our desires weave the patterns of our social
involvements, the conduits sour energy makes as we frow our lives.

Nancy speaks of motivating others to join us and elaborates on plans to
follow.

Some decades ago "the Future of Man" proposed that the earth was growing an
envalope of thought that would direct evolution. The writer was a priest
and called this envalope the "noosphere, the living Christ."

Clearly, it is the internet. We use it to get what we want. Planning for
what we want becomes a process of negiotation.