I worry about money today? I never used to but I do now. I am not alone. More and more people look into the future and worry that money might not buy anything or that they might now have any or both. There are all sorts of signs.

A stockmarket that is not based on the real economy. The 1% who have most of the wealth? Workers who are not rewarded for their work? Cyprus and "austerity"? Bank Bailouts that supersede everyone and everything? The rape of our environment in the search for "growth"? Bitcoin? There is lots of evidence that something wrong with money today.

Money seems to have become an end in itself and it has become too distanced from the needs of people and the planet. What is wrong and what will come? I have a few ideas that I would like to test with you.

I think that institutions have captured humanity. We think they serve us but they don't and money is central to this capture.

We go to school to learn. But in reality 60% leave school knowing almost nothing and the rest know a lot of abstract things that give them a credential. Schools teach to the test and the credential. In reality most of us leave school knowing little about what is really important. We have few practical skills. Our education system is an end in itself.

In theory our health system should keep us well. If we have a car accident it does a very good job of fixing us. But for our general health, look at the outcomes. We are all getting more and more sick and this is all costing us more and more money. Health care has become an end in itself.

What has banking become? It used to help people and business finance real things, like build a factory, a canal, a house. It used to help people trade with each other. But now most of the money in banking is made by financial manipulation. Banking has become divorced from the real economy. It is an end in itself.

And the job? If we are honest, most jobs today are also abstractions from the core of making and serving in a real way. You are a part of a machine. You are not the personification of the thing or the service. Your pay in a job is not based on the value that you create, look at how wages have lagged productivity, they are based on leverage. How low can you be paid and still turn up for work is the equation. The job is an end in itself.

But there was another way that did root everything in the real.



This picture is of a ledger that was used by merchants in the Hanseatic League from the 14 - 17 century to conduct their business.

They also had a problem with money at the time. Then money was made from gold or silver and was made only by kings. There was not enough money around to conduct trade. So the merchants of the Hanse came up with a system that solved their problem and that kept their trade OUTSIDE THE CONTROL OF GOVERNMENT.

Groups of merchants would do business with each other and use a ledger instead. I buy fish from you, we record the sale in the ledger. You buy iron from me, we enter the sale in the ledger. We supply wood and building materials to another partner, it goes into the ledger. Periodically we net the whole thing out. Very little real cash was needed. But the transactions were real. This was not barter. There was a cash value attached. So we all knew where we stood. And best of all, when we sell to outsiders, like the English, they pay cash which flushes the whole system.

This is the scale of the Hanse:



Each city had its own ledger. And then the cities had larger ledgers that made up the Baltic region.

This system can and did scale. It made the Hanse the wealthiest region in the world for several hundred years.

The ledger was a public document shared within the group. It was the partnership platform. Big deals could be done like this too such as building a fleet or improving the harbor. Bigger deals could be done when Lubeck and Danzig and other cities funded anti pirate patrols.

The entire Hanseatic League used this approach of public business to give them the edge over all who had to finance themselves using cash alone or who had to borrow conventionally. The ledger was in effect their credit system: for it enabled them to escape the bonds of a monetary system that, then, was based on physical gold and silver.

Are you starting to see how we might do this today?

The General Store and Barn Building

This is a tested idea. This is how credit also worked in rural Canada and America for hundreds of years. In rural communities there was no cash for most of the year. So how did business get done? With a ledger!

In that case the ledger was held by the General Store. Again in rural America, cash was rare and only was abundant after harvest. You bought from the store using the ledger and the store ledger was used to record you buying and selling other things with your neighbours. Harvest would flush the system when we sold to outsiders.

Without the social trust platform of the General Store, economic life in rural areas would not be possible. But here, the the power of Trust and Community built on the ledger added another layer of value. This I call Barn Building.

In rural America and Canada, social trust extended beyond good to include services.

In these kinds of communities there was also a social labour exchange. If you needed a new barn for your son, the community would give its labour in return for an expectation that you would do the same to others. Here the ledger was kept in the minds of the community. The more you were seen as being generous, you lent me your cart, you gave me a cow when my milker died, the more the entire community would be ready to aid you. In this kind of system, the more you give, the more social credit you have.

Today, this is how Open Source software works. The core deal being that I can use the elements in the system but I have to give back my improvements. The reality being that the more you give to the system, the more you can expect to get back. At first in status, or trust, and then in material help. The Open Source community lives their lives in public. Inside their world, all the key players are well known. Newbies have to prove their worth. This is normal and human.

The real world

In a value system based on real good and services, money and credit can be attached to reality. There will be enough money al the time because it is based on real trade in real things. So such a system avoids two big problems of all other money systems.

If money is rooted in a scarce commodity, like Gold or Cowrie shells, there is never enough. Kings debase the currency or others do. If the money is based on paper and the trust in a government, in the end governments debase the trust. This is what we see today. Money is worth a fraction of what it was 100 years ago. It has been no store of value.

The future of money

In parts of Europe, such as on Greek Islands, where no on has any cash, markets are emerging where all involved trade with each other based on selling real goods and real services for a money amount, like the Hanse, but based on the ledger.

My bet is that online markets will arise that are much bigger than a town on a Greek Island. Those of us who have little access to cash will be able to use the online ledger to buy and sell real goods and services.

I already consult locally for food. It's a good deal for both sides. We work out my hourly rate. This gives me a credit in the store and I buy food at her market rates. We both win.

We are learning how to insert trust into this. Look at eBay, at Airbnb. Look at sharing sites. We are so close.

For personal trust and reputation are central. This is less about contract than shame and reputation. The letter of the law will not save you if you behave badly in such a system.

At the same time, new clearing systems are emerging outside the banking system I am looking at Ripple.com.

I see a system emerging that will be outside the control of the current system. That like MOOCS and Universities will make the current offer look like a bad deal. Like Craigslist, make the classified in newspapers look like a bad deal. Like downloads and sharing make albums look like a bad deal.

THEY will fight this. But will lose. They will lose because this kind of money works for 99% of us.

If we go down this route we will humanize money. Money will represent real value that each of us create. Money will be limited to the real value that the planet offers too. Money will be balanced with reality. Money will be a store of real value. Each of us will be able to get what we earn.

More later on this but you can see more right away in my book You Don't Need a Banker to get Credit. You can get this here



