On March 1, 1995, Neal Stephenson, the famous science fiction writes of Snowcrash and the Diamond Age, wrote a short fiction piece for Time, which described a future “crypto-credit” system.
I asked Kevin Carson to comment on that story, THE GREAT SIMOLEON CAPER:
“Just for starters, I really liked the tone; it gave me the same “Babylon is about to fall” vibe I picked up in Cory Doctorow’s online chapters of Theme Punks.
I notice the story was written in 1995, and it’s hard for me to estimate its fictional time frame just by comparing the events in the story to a likely near-future exrapolation from the mid-90s. But I’m guessing it probably could have been written with–say–2009 in mind.
Given the euphoria over the “information superhighway” back then, Stephenson’s merging of “Internet and optical fiber and HDTV and digital cash” sounds like something it would be plausible to expect by now.
Of course, he failed to anticipate the extent to which the Copyright Nazis would put the country under lockdown. For one thing, it’s a lot harder to merge cable TV with the Internet when it’s illegal to circumvent the DRM that prevents transferring content from one platform to another–unless the entire “superhighway” or “metaverse” is DRM’ed and run on Windows, which ranks pretty high on my list of nightmares.
For another, although his observation that “in the Metaverse, you can actually whip out a gun and blow the Energizer Bunny’s head off,” should appeal to anyone who’s ever read the Cluetrain Manifesto (as I recall Searle, Weininger et al used the analogy of the ‘bots on MST3K ruthlessly mocking commercials), I’m pretty sure that would violate enough trademark rights under the DMCA to get any would-be parodist a full-jackboot facial massage in Gitmo. Or at least extraordinary rendition to a country that doesn’t recognize Fair Use.
I find the crypto-credit idea appealing, although Stephenson puts something of an anarcho-capitalist spin on it (with the “Distributed Republic” folks sounding an awful lot like the e-gold/seasteading crowd, and the main motivation for the currency as tax-dodging). But it seems to me that another major motivation for such an encrypted currency would be to circumvent bank licensing laws that prevent (among other things) the crowsourced mobilization of credit through social lending networks, without any capitalization besides the members’ own contributions. That kind of thing (ordinary producers advancing credit to each other against future production, and pooling their small capitals outside the monopoly banking system) is as much a nightmare of the usurers who profit from artificial scarcity of credit and money, as free culture and software are to the artificial scarcity profiteers in the cognitive realm.
And it also strikes me that any such currency would be designed on a tiered and/or modular basis, with the the most important service package being an encrypted electronic LETS system for facilitating exchange in local, alternative economies (not that it wouldn’t also be useful on a larger scale, on a secondary level).
Crypto-credits would be great for circumventing banking regulations that hinder mutual credit schemes, and for facilitating local trade off the books with unlicensed practitioners (the low-overhead microenterprises in the household and informal economy that I’m so fond of, who would undoubtedly like a secure means of exchange that didn’t leave a paper trail for the local inspection/licensing regime)–as well as for eliminating what federal, state and local taxes contribute to overhead. This latter is especially important in bringing out the efficiencies of the informal economy, because–as Scott Burns pointed out in The Household Economy–if the tax burden on enterprises is (say) 50%, that means a plumber and an electrician can’t exchange their services on an hour-for-hour basis in the conventional capitalist economy. The plumber has to work an hour and a half to pay for an hour of the electrician’s time, and vice versa.
One caveat I have is that Stephenson seems to view the currency mainly as a store of value, rather than a means of facilitating exchange. But the primary benefit of a local currency, as a facilitator and measure of exchange, is that it provides liquidity for exchange of future services by people who don’t presently have any money (in the sense of a store of value) accumulated.”