For Layne Hartsell and Emanuel Pastreich, looking at the commons-based models might be worth it in the case of North Korea. According to our South Korean friends, their progressive President, a ‘left-Clintonian’ in their view, is doing a lot for peace and de-nuclearization but the approach is to let loose extractive industry once a peace accord is achieved. Here is a possible alternative approach.

Originally published on atimes.com

Emanuel Pastreich, Layne Hartsell: Could an emergent North Korea provide the world with a new, from-scratch benchmark of sustainable, collaborative economic and social development? With geopolitical change and emerging technologies, the idea of a national “commons” now looks increasingly feasible.

Relations between North and South Korea are changing so rapidly, the pressing question is no longer what the next step in this process of reconciliation will be, but rather where the peninsula is heading in the political, economic and cultural senses.

A door is opening for the institutional transformation of the “Hermit Kingdom” with new concepts and technologies. The implementation of new approaches to government and the building of new infrastructure could make North Korea an inspiring experiment that other nations can model.

However, amid promising developments on the Korean Peninsula, media report that multinationals are planning to establish an extractive economy that will generate quick wealth from the exploitation of North Korea’s rich mineral resources and cheap labor.

The profits will not benefit impoverished North Koreans, but rather international investors. This suggests that Wall Street, or its Japanese or Chinese equivalents, will develop North Korea’s economy according to the blueprint offered by postwar Iraq.

But North Korea does not have to choose between following the backward economic policies of North Korea’s Labor Party, which have produced stagnation and poverty, nor must it embrace a consumption-based neoliberal “development” policy run by global investment banks and the consulting firms that they fund.

There is an alternative: a third way for North Korea to leapfrog dirty and exploitative “growth” but still reach sustainable economic and political success.

Embracing the 21^st-century commons

This “third way” for North Korea is a collaborative economy and society. This means embrace of the emerging global commons in education, politics, manufacturing and economics made possible by P2P (peer-to-peer) systems and commons-oriented production (for example Linux, Wikipedia). Because North Korea is in essence starting from scratch, it can adopt the Internet of Verification (such as blockchain and holochain) in a more comprehensive manner than has been done elsewhere.

Such economic innovations will be shared and participatory, in the sense that socialist economies were, but the decision-making process will be distributed throughout society so as to avoid authoritarian politics, and thereby empower communities to set priorities.

This approach will allow North Korea to benefit from the advantages of internationalization without allowing international finance to dictate what North Korea will become. Concrete proposals for such a sharing economy that are viable alternatives to exploitative and extractive market economies have been made by the P2P Foundation in Amsterdam and the Commons Foundation in Seoul.

North Korea can empower its people by integrating them into the global P2P economy that links individuals with their peers in South Korea and around the world, so that they can realize their full potential through commons-based micro-manufacturing controlled by neither the state nor by Wall Street. Rather than being exploited for cheap labor, or cheap mineral resources, North Korea can develop a model for positive globalization powered by people, not by capital.

Pre-modern Korea provides an example of the kind of fundamental conceptual shift required. The Japanese colonial strategy of 1910-45 demolished the shared communities of mutual support that once thrived in Korean villages, by means of the Japanese equivalent of enclosure acts that deprived most Koreans of their land and traditional means of production.

Choi Yong-gwan, founder of the Commons Foundation, explains how the commons is no new idea in Korea. “The village contracts (hyanghak) … defined roles in the community, but did not assign absolute ownership. Those village contracts were destroyed during the Japanese colonial period. The deepening inequality born of inhuman competition and the resulting concentration of wealth started then.”

The commons could provide a model for how wealthy nations can work with those less developed in a constructive, non-exploitative manner by creating shared economies focused on citizens. Moreover, because a commons economy is not about foreign investment or about exploiting labor, it does not fit into the standard models of economic interaction described in the current United Nations sanctions against North Korea. It therefore offers a realistic window of hope.

Although Western media portray North Korea as a bizarre, isolated and mysterious nation, recent negotiations with South Korea have revealed that it is like other developing nations struggling to find a place in a ruthless globalized order dominated by financial institutions. The innovations the authors of this article are proposing do not consist of a particular technology, but rather of an open platform that gives North Korea access to knowledge, to technology, to expertise and to financial resources from around the world that will permit it to make an economic transition without falling under the domination of oligarchs.

Commons 101: What to do

North Korea has little modern technology – but also has little of the commercialism or the consumer fetishism that have ripped apart the cultures of other nations. It therefore offers unprecedented opportunities for institutional innovation of which other counties are not capable, precisely because North Korea’s start point is zero.

North Korea could require that all buildings employ solar power; that manufacturing allow for open-source innovations at the local level; that services be shared between families without a middleman; and that local governments be allowed to develop ties with other local governments in other countries for education and social exchange.

North Korea could establish innovative financial systems that nourish local cooperatives employing cryptocurrencies and crowd funding as means to build local economic autonomy while also allowing foreign investment in the form of crowd funding, or micro-investments by supporters around the world.

North Korea could put together a shared economy wherein everything, from vacuum cleaners and saws, to washing machines and solar power generators, is held together in trust for the community. It could set up programs for the barter of services (from caring for children or the elderly to cleaning and cooking) that recognize contributions of all citizens. It could pair elderly people with young people, and farmers with city dwellers, to create new cultural and economic synergies.

North Korea lacks quality highways and related dependencies on automobiles. Therefore, cities with shared transportation, all-electric transportation, or even urban planning that eliminates the need for automobiles are possible in North Korea.

The adoption of a commons – of a shared economy rooted in regional agriculture and micro-manufacturing – is essential to reduce the unsustainable overproduction that plagues East Asia today and which not only promotes waste and economic disparity, but is also a major factor behind military conflicts.

North Korea’s opening could present a priceless opportunity to establish a healthy model of P2P internationalization.

Commons 101: How to do it

South Korea should play a major role, not only because it shares a common language, but also because it has established powerful precedents for a P2P economy.

South Koreans have displayed tremendous enthusiasm for participatory politics, culminating in the “Candlelight Revolution” of 2016 that brought millions of citizens together to demand an end to corrupt politics.

Seoul launched a program to create local villages across the city four years ago that provides a powerful platform for a sharing economy. And the city has recently committed US$54 million to establish blockchain systems throughout Seoul and to train a new generation of experts to use them effectively.

North Korea needs a P2P advisory committee that focuses on the ethical implications of economic and technological change, not on short-term profits. South Koreans can play this role, but it will also be important to obtain advice from around the world about how to avoid the traps emerging economies fall into.

North Korea has extensive deposits of coal, uranium, iron, gold, zinc and rare-earth minerals worth around $6 trillion, according to South Korean mining company Korea Resources. One of the first recommendations of the P2P advisory committee might be a freeze on the exploitation of subsurface resources until Pyongyang possesses sufficient expertise to assess the long-term environmental impact of such efforts.

The vetting of all proposals for the mining of resources; for the building of transportation infrastructure; and for the development of urban spaces by a P2P network of experts could be important first steps.

North Korea must avoid getting into heavy debt during the first stage of its opening. The committee could help it craft policies that ensure short-term returns for investors are not a factor in planning, while also assuring that there is no risk of capital flight. To prevent a situation in North Korea similar to the rise of oligarchs after the fall of the Soviet Union, people should be empowered to form community banks and create participatory financing mechanisms.

North Korea does not have to be a mysterious, closed, inscrutable remnant of the Cold War that must “catch up” with the “advanced” industrialized world. Rather, North Korea can be an inspiring experiment – a space wherein blockchain technologies, micro-manufacturing, a sustainable energy infrastructure and a P2P approach to internationalization ushers in a new era for itself, for Northeast Asia – and for the world.

Emanuel Pastreich is president of the Asia Institute (asia-institute.org), a think-tank that addresses challenges including climate change, the impact of technological change on society, and rapid shifts in international relations. He has written about the environment, technology, globalization, international relations and business in Asia for various journals, and has authored two books in English, five in Korean and one in Chinese.

This article was co-authored with Layne Hartsell, a fellow at the P2P Foundation who focuses on the philosophy of ethics and technology. He is also the director of the Technology Convergence and 3E (energy, environment and economy) Program at the Asia Institute in Seoul.

Photo by Clay Gilliland

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Nithin Coca: The Platform Cooperative Japan Consortium (PCJ) is the first organization in Asia focused on promoting the idea of platform cooperatives — businesses that bring the structure of traditional cooperatives, including worker ownership and governance — to the digital world. PCJ was founded by Mathias Sager and is directly connected to the New York City-based Platform Cooperativism network (Shareable is a member of this cohort). Originally from Switzerland, Sager has spent several years living in Japan. Besides his work with PCJ, he is an independent researcher, social entrepreneur, and leadership and strategy adviser for Japanese and global organizations. He is also pursuing a master’s degree in psychology from the University of Liverpool in the U.K.

The consortium has members from Japanese academia, the country’s existing cooperative sector and civil society. In a short period, they have already organized several events with the goal of introducing the platform cooperative idea to Japan, and localizing it as a solution for the country’s economic and social challenges. We spoke with Sager to learn more about PCJ and the potential for platform cooperatives in Japan.

Mathias Sager (fourth from left) at Platform Cooperative Japan Consortium event. Photo courtesy of PCJ.

Nithin Coca, Shareable: What is Platform Cooperative Consortium doing to spread the platform co-op idea in Japan?

Mathias Sager, Platform Cooperative Japan Consortium: Our mission is to support the cooperative digital economy through research, experimentation, education, advocacy, documentation of best practices, technical assistance, the coordination of funding, and events.

Our web presence is helping us to reach potential PCJ stakeholders. Currently, we want to extend our online visibility in the social co-op Fediverse and on Mastodon in particular as a Twitter alternative, where there is already a lively user base in Japan as well. Part of our work is to actively contact organizations and individuals who could potentially be interested in the Platform Cooperativism concept and in becoming a member of the PCJ Consortium. As we did in the past regularly, we continue to organize PCJ public events at which we present the concept and discuss with the audience. Besides own events, we welcome guest speaking opportunities as, for example, at the J-Global Institute of Collaboration or at Nerd Nite. Also, other events such as Social Innovation Japan provide a good possibility to spread the word further.

Can you explain more about the challenges facing Japan that platform co-ops could address?

Japan’s economic growth rate in the past 10 years has been averaging in between 0-2 percent range, with negative 4 percent being the lowest in 2009, after the Lehman shock. Japan is hyper-aging and its population is declining due to low fertility. With this aging population and declining working-age population, economic researchers estimate Japan’s potential growth rate no more than 1 percent.

It is deeply worrying today that youth in Japan are often unable to find regular jobs after graduation. Platform co-ops should be able to help this lost generation and provide the many free part-timers fairer job opportunities. It is not the younger talents who are in decision power — due to seniority-based promotion systems, only 9 percent of Japanese managers are below the age of 40, compared to 62 percent in India and 76 percent in China. Hidden under the low unemployment rates are often precarious labor conditions. Working poor comprise an increasingly larger segment of the working population. For example, it could be a promising way to form freelancer-cooperatives who create or work for platform co-ops. Platform co-ops could also emerge from rural revitalization initiatives.

The private and public sector are struggling to address the challenges in personal care, especially for the increasing number of elderly. In Japanese culture, women are still widely encouraged to stay at home. Although women are also used to drive corporate profits, they are not sufficiently supported in their burden of child-rearing mothers at the same time though. Japan’s corporations, long heralded for their lifetime employment strategy, demand long office hours, which keeps fathers away from their families. However, Platform Cooperativism can be an answer to these issues by responding to the desire for more work-life harmony for all. … Cooperatives, and platform cooperatives, can help revitalize the Japanese economy.

Doesn’t Japan already have a large cooperative sector? Can platform co-ops build on that?

Japan is known for its mostly consumer cooperative tradition. Indeed, roughly one-third of Japanese households belong to co-ops. Cooperatives have long been an organizational solution to labor exploitation. Platform cooperatives strive to bring the concept of ownership to the digital economy, exploring not just employee ownership but also user data ownership. We can revitalize cooperative idea with platform cooperatives that will speak to a younger generation because they understand that something is wrong. … Millennials, in particular, may appreciate the opportunities for a better work-life balance. Cooperatives might be able to provide such a balance in addition to purpose and identification. Furthermore, cooperative governance can be designed to reward performance, therefore supporting personal growth in many ways.

What are your future plans and how do you hope to engage your target audiences?

When presenting Platform Cooperativism as a fairer user-worker-owned model of running online platforms, I often hear answers like “that’s a great idea, but it’s too difficult to realize.”

While grassroots efforts are essential, the cooperative way should also be supported top-down as a political priority. A cooperative economy can not only be profitable but by not passing excess profits to just a few it is also able to provide for welfare benefits and community development where often tax paid government efforts failed in demonstrating sufficiently sustainable effects.

The movement is relevant for any individual and organization that is valuing sustainable online platform solutions. Cooperative values ensure that the prosperity and decision-making can be shared between value creators working together for mutual benefit and the transition to a more equitable platform economy.

Platform co-ops could be of local scope but are inherently able to function cross-border in the world wide web to build global membership bases. A parallel development and step-by-step convergence of national and international segments may provide a Japan specific avenue to keep the politics local and open up to international users for global cooperation at the same time. I had the idea to coin the term of “sato-digital” as derived from satoyama or satoumi. Sato (里) means village and yama (山) means mountain. One definition is “the management of forests through local agricultural communities.” More recently, satoyama has been defined not only as mixed community forests, but also as entire landscapes that are used for agriculture. In that sense, Sato-digital could be translated into, suitable to the platform co-op concept — the management of a digital business through (respectively “by, of, and for”) the local digital community and the broader platform co-op ecosystem in Japan.

This Q&A has been edited for length and clarity.

Header image by Pawel Janiak via Unsplash

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Nithin Coca, Shareable: So what does the concept civic economy mean to you?

Eguchi Shintaro, co-author of “Civic Economy in Japan”: It is based on the real meaning of “economy.” If you look at the etymology of the Greek word, it represents a community that actually is sustainable and generates and regenerates what it has from its resources.

In the concept of civic economy, civilization or people is the focus of economy. This is the focus of my research. Civic economy is originally a concept in introduced in Europe, but there has been this idea in Japan for centuries too to heighten and advance civilization through the economy, and as a byproduct this can also be a sharing economy.

Civic economy is basically where individuals share what they have — skills, knowledge, services — to develop the economy of a certain area. The original meaning is basically a community of cooperation… a community that is sustainable, that generates its own resources.

Can you tell me about the history of sharing or civic economy in Japan? What is the underpinning of sharing in Japanese society?

In Edo era, there were ideas and functions that were held by small organizations that were early version of banks. This is where people in communities pitch in and pool money to invest, and have that money held in cases. For example, [if] someone had a fire and lost everything, they might loan that money for them to rebuilt their lives. Or sometimes, they would give that money. This is a system of mutual help, beginning of cooperativism in Japan. Because it is related to civil economy, I am recently getting more interested in cooperativism.

Then, the sense of commons was stronger than sharing. For instance in a village, there might be a well that a community uses together, or cooperative housing, or families taking care of each other’s children. Within that small community, it was complete. From our perspective, it is sharing, but at that time, the sense of personal ownership was not so strong. It was much stronger to have a sense of commons.

What happened to these systems?

After the Meiji Restoration, Japan went through modernization. This meant the sense of capitalism and individualism has gotten stronger, so there is a sense of having individual resources. That’s why individuals and family unit has gotten much stronger. The idea of capitalism meant companies promoted the sales of appliances, and meant household owned things, and that’s when the idea of personal ownership was introduced.

What about the growing attention on rural economies in Japan. Can sharing help revitalize those economies?

During Japan’s bubble economy era, the economy boomed, and major cities became bigger and bigger, and basically have extracted from rural areas, which have declined in population and their economies declined too.

Today, the population is still declining in rural areas, and that’s why there are very few businesses willing to move to rural areas, and in rural areas they don’t see any venture capital. Young people are leaving these areas to look for jobs in big cities, and then they make money and send some money back. Gradually, rural area is becoming more elderly, and there is more aging population.

There is a danger of small towns or small cities maybe disappearing entirely. As far as local governments go, they need to stabilize their economy. And so, within the community, they have few resources, which are getting fewer and fewer. In rural areas … local governments haven’t put many efforts in building more entrepreneurs in their areas, so the sharing economy is one way for rural governments to create and generate funds for their own communities.

What is behind the more recent resurgence in interest in sharing or civic economy in Japan?

The Great Kobe Earthquake, and other disasters in Japan were important milestones. When there is a huge natural or social disaster, people learned that it was impossible to sustain or survive all on their own. That’s when the idea of mutual help was reintroduced and got stronger. Along with that, the Japanese economy stagnated, so this is when the idea of cooperation re-emerged.

The Great East Japan Earthquake is also an important point when the idea of mutual help got stronger. In other countries, there is a strong interest in cooperativism, and in Japan, there is a need to review and look at cooperativism again. Of course the basis of that is because it is very democratic. It’s not from the point of view of the study of the economy, it is also from how you can democratically operate,so it’s important to study it.

Can you tell me about civic economy projects that are representative of the potential for sharing to revitalize the economy?

One example is a Toyo-oka, Kinosaki Onsen in Hyogo Prefecture. It is a hot springs (onsen) town. It’s a very famous town because there is a novel written by a famous Japanese author, about 100 years ago. They rely on tourism.

In the past few years, there is a movement to create some projects to keep culture and people in the city. The project is launched by the local government, with one project, Books in Onsen started by onsen inn owners who had a union already. It’s like an Artists in Residence program, they invite artists to stay in this area and create something. In exchange for free residence, artists are supposed to open their studios, when they are rehearsing or creating, to residents, so they can come and watch what they do. Or they have to provide workshops for children. Kids can also use these facilities to create their own pieces of art. … For local residents, they see in the books and stories names of places that are very familiar to them, so in that way, it’s promoting literature, creation, and it supports tourism, because of the fans who want to come and get these books. They have already sold 100,000 copies. And many Japanese media have picked up these stories too.

Another example is Hagiso, in the eastern part of Tokyo, an area which has a lot of old buildings. It’s a building which used to be an apartment and which is 60 years old that was renovated to have a cafe, gallery, and shop.

In this neighborhood, Hagiso is in the middle and functions as a front desk, and you might have lodging in an old Japanese farmhouse, where you can stay. For bath, they will give a ticket to another facility which is a hot spring bath. If they want to eat dinner, they will get a list of restaurants in the neighborhood for them to pick. They can rent a bike. Since this is an old neighborhood, we have facilities where they have cultural experiences like a tea ceremony. So this is a system that was created in the neighborhood, and economy itself it pulls and is shared by institutions in the neighborhood. Small businesses getting together to mutually generate business and help create and sustain the local economy.

What do you see as the future for sharing?

There have been a lot of efforts to increase start-up companies, or educate entrepreneurs in local areas, starting in the late 2000s. Amidst that, there are sharing businesses build on sharing economy concepts, particularly using IT. This is chance, to see how IT technology can be used to help society. But of course, that does not mean that IT literacy is increasing among older age bracket. There is a need for us to increase the IT use among this age bracket.

There is little understanding of sharing among local governments. Cities need to develop this vision. Citizens, private sector, and governments all have to come together, and work in the same direction, with the same goals. We don’t have that yet — they are divided, and working separately. The people have not really felt or understood the Sharing City vision.

One of the biggest things right now is to help these groups understand each other and face the same direction — need to create something that people and the local government that can make their own city attractive, and build civic pride together.

 Cross-posted from Shareable

Photo by thomwisdom

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Japan has found a way to write off nearly half its national debt without creating inflation. We could do that too.

Let’s face it. There is no way the US government is ever going to pay back a $20 trillion federal debt. The taxpayers will just continue to pay interest on it, year after year.

A lot of interest.

If the Federal Reserve raises the fed funds rate to 3.5% and sells its federal securities into the market, as it is proposing to do, by 2026 the projected tab will be $830 billion annually. That’s nearly $1 trillion owed by the taxpayers every year, just for interest.

Personal income taxes are at record highs, ringing in at $550 billion in the first four months of fiscal year 2017, or $1.6 trillion annually. But even at those high levels, handing over $830 billion to bondholders will wipe out over half the annual personal income tax take. Yet what is the alternative?

Japan seems to have found one. While the US government is busy driving up its “sovereign” debt and the interest owed on it, Japan has been canceling its debt at the rate of $720 billion (¥80tn) per year. How? By selling the debt to its own central bank, which returns the interest to the government. While most central banks have ended their quantitative easing programs and are planning to sell their federal securities, the Bank of Japan continues to aggressively buy its government’s debt. An interest-free debt owed to oneself that is rolled over from year to year is effectively void – a debt “jubilee.” As noted by fund manager Eric Lonergan in a February 2017 article:

The Bank of Japan is in the process of owning most of the outstanding government debt of Japan (it currently owns around 40%). BoJ holdings are part of the consolidated government balance sheet. So its holdings are in fact the accounting equivalent of a debt cancellation. If I buy back my own mortgage, I don’t have a mortgage.

If the Federal Reserve followed the same policy and bought 40% of the US national debt, the Fed would be holding $8 trillion in federal securities, three times its current holdings from its quantitative easing programs.

Eight trillion dollars in money created on a computer screen! Monetarists would be aghast. Surely that would trigger runaway hyperinflation!

But if Japan’s experience is any indication, it wouldn’t. Japan has a record low inflation rate of .02 percent. That’s not 2 percent, the Fed’s target inflation rate, but 1/100^th of 2 percent – almost zero. Japan also has an unemployment rate that is at a 22-year low of 2.8%, and the yen was up nearly 6% for the year against the dollar as of April 2017.

Selling the government’s debt to its own central bank has not succeeded in driving up Japanese prices, even though that was the BoJ’s expressed intent. Meanwhile, the economy is doing well. In a February 2017 article in Mother Jones titled “The Enduring Mystery of Japan’s Economy,” Kevin Drum notes that over the past two decades, Japan’s gross domestic product per capita has grown steadily and is up by 20 percent. He writes:

It’s true that Japan has suffered through two decades of low growth . . . . [But] despite its persistently low inflation, Japan’s economy is doing fine. Their GDP per working-age adult is actually higher than ours. So why are they growing so much more slowly than we are? It’s just simple demographics . . . Japan is aging fast. Its working-age population peaked in 1997 and has been declining ever since. Fewer workers means a lower GDP even if those workers are as productive as anyone in the world.

Joseph Stiglitz, former chief economist for the World Bank, concurs. In a June 2013 article titled “Japan Is a Model, Not a Cautionary Tale,” he wrote:

Along many dimensions — greater income equality, longer life expectancy, lower unemployment, greater investments in children’s education and health, and even greater productivity relative to the size of the labor force — Japan has done better than the United States.

That is not to say that all is idyllic in Japan. Forty percent of Japanese workers lack secure full-time employment, adequate pensions and health insurance. But the point underscored here is that large-scale digital money-printing by the central bank used to buy back the government’s debt has not inflated prices, the alleged concern preventing other countries from doing it. Quantitative easing simply does not inflate the circulating money supply. In Japan, as in the US, QE is just an asset swap that occurs in the reserve accounts of banks. Government securities are swapped for reserves, which cannot be spent or lent into the consumer economy but can only be lent to other banks or used to buy more government securities.

The Bank of Japan is under heavy pressure to join the other central banks and start tightening the money supply, reversing the “accommodations” made after the 2008 banking crisis. But it is holding firm and is forging ahead with its bond-buying program. Reporting on the Bank of Japan’s policy meeting on June 15, 2017, The Financial Times stated that BoJ Governor Kuroda “refused to be drawn on an exit strategy from easy monetary policy, despite growing pressure from politicians, markets and the local media to set one out. He said the BoJ was still far from its 2 per cent inflation goal and the circumstances of a future exit were too uncertain.”

Rather than unwinding their securities purchases, the other central banks might do well to take a lesson from Japan and cancel their own governments’ debts. We have entered a new century and a new millennium. Ancient civilizations celebrated a changing of the guard with widespread debt cancellation. It is time for a twenty-first century jubilee from the crippling debts of governments, which could then work on generating some debt relief for their citizens.

Photo by portable_soul

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When then-Fed Governor Ben Bernanke gave his famous helicopter money speech to the Japanese in 2002, he was talking about something quite different from the quantitative easing they actually got and other central banks later mimicked. Quoting Milton Friedman, he said the government could reverse a deflation simply by printing money and dropping it from helicopters. A gift of free money with no strings attached, it would find its way into the real economy and trigger the demand needed to power productivity and employment.

What the world got instead was a form of QE in which new money is swapped for assets in the reserve accounts of banks, leaving liquidity trapped on bank balance sheets. Whether manipulating bank reserves can affect the circulating money supply at all is controversial. But if it can, it is only by triggering new borrowing. And today, according to Richard Koo, chief economist at the Nomura Research Institute, individuals and businesses are paying down debt rather than taking out new loans. They are doing this although credit is very “accommodative” (cheap), because they need to rectify their debt-ridden balance sheets in order to stay afloat. Koo calls it a “balance sheet recession.”

As the Bank of England recently acknowledged, the vast majority of the money supply is now created by banks when they make loans. Money is created when loans are made, and it is extinguished when they are paid off. When loan repayment exceeds borrowing, the money supply “deflates” or shrinks. New money then needs to be injected to fill the breach. Currently, the only way to get new money into the economy is for someone to borrow it into existence; and since the private sector is not borrowing, the public sector must, just to replace what has been lost in debt repayment. But government borrowing from the private sector means running up interest charges and hitting deficit limits.

The alternative is to do what governments arguably should have been doing all along: issue the money directly to fund their budgets. Having exhausted other options, some central bankers are now calling for this form of “helicopter money,” which may finally be raining on Japan if not the US.

The Japanese Trial Balloon

Following a sweeping election win announced on July 10th, Prime Minister Shinzo Abe said he may proceed with a JPY10 trillion ($100 billion) stimulus funded by Japan’s first new major debt issuance in four years. The stimulus would include establishing 21st century infrastructure, faster construction of high-speed rail lines, and measures to support domestic demand.

According to Gavyn Davies in the July 17th Financial Times:

Whether or not they choose to admit it – which they will probably resist very hard – the Abe government is on the verge of becoming the first government of a major developed economy to monetise its government debt on a permanent basis since 1945.

. . . The direct financing of a government deficit by the Bank of Japan is illegal, under Article 5 of the Public Finance Act. But it seems that the government may be considering manoeuvres to get round these roadblocks.

Recently, the markets have become excited about the possible issuance of zero coupon perpetual bonds that would be directly purchased by the BoJ, a charade which basically involves the central bank printing money and giving it to the government to spend as it chooses. There would be no buyers of this debt in the open market, but it could presumably sit on the BoJ balance sheet forever at face value.

Bernanke’s role in this maneuver was suggested in a July 14th Bloomberg article, which said:

Ben S. Bernanke, who met Japanese leaders in Tokyo this week, had floated the idea of perpetual bonds during earlier discussions in Washington with one of Prime Minister Shinzo Abe’s key advisers. . . .

He noted that helicopter money — in which the government issues non-marketable perpetual bonds with no maturity date and the Bank of Japan directly buys them — could work as the strongest tool to overcome deflation . . . .

Key is that the bonds can’t be sold and never come due. In QE as done today, the central bank reserves the right to sell the bonds it purchases back into the market, in order to shrink the money supply in the event of a future runaway inflation. But that is not the only way to shrink the money supply. The government can just raise taxes and void out the additional money it collects. And neither tool should be necessary if inflation rates are properly monitored.

The Japanese stock market shot up in anticipation of new monetary stimulus, but it dropped again after the BBC aired an interview with Bank of Japan Governor Haruhiko Kuroda recorded in June. He ruled out the possibility of “helicopter money” – defined on CNBC.com as “essentially printing money and distributing payouts” – since it violated Japanese law. As the Wall Street Journal observed, however, Bernanke’s non-marketable perpetual bonds could still be on the table, as a way to “tiptoe toward helicopter money, while creating a fig leaf of cover to say it isn’t direct monetization.”

Who Should Create the Money Supply, Banks or Governments?

If the Japanese experiment is in play, it could settle a long-standing dispute over whether helicopter money will “reflate” or simply hyperinflate the money supply.

One of the more outspoken critics of the approach is David Stockman, who wrote a scathing blog post on July 14th titled “Helicopter Money – The Biggest Fed Power Grab Yet.” Outraged at the suggestion by Loretta Mester of the Cleveland Fed (whom he calls “clueless”) that helicopter money would be the “next step” if the Fed wanted to be more accommodative, Stockman said:

This is beyond the pale because “helicopter money” isn’t some kind of new wrinkle in monetary policy, at all. It’s an old as the hills rationalization for monetization of the public debt – that is, purchase of government bonds with central bank credit conjured from thin air.

Stockman, however, may be clueless as to where the US dollar comes from. Today, it is all created out of thin air; and most of it is created by private banks when they make loans. Who would we rather have creating the national money supply – a transparent and accountable public entity charged with serving the public interest, or a private corporation solely intent on making profits for its shareholders and executives? We’ve seen the results of the private system: fraud, corruption, speculative bubbles, booms and busts.

Adair Turner, former chairman of the UK Financial Services Authority, is a cautious advocate of helicopter money. He observes:

We have been left with so much debt we can’t just grow our way out of it – we should consider a radical option.

Not that allowing the government to issue money is so radical. It was the innovative system of Benjamin Franklin and the American colonists. Paper scrip represented the government’s IOU for goods and services received. The debt did not have to be repaid in some other currency. The government’s IOU was money. The US dollar is a government IOU backed by the “full faith and credit of the United States.”

The U.S. Constitution gives Congress the power to “coin money [and] regulate the value thereof.” Having the power to regulate the value of its coins, Congress could legally issue trillion dollar coins to pay its debts if it chose. As Congressman Wright Patman noted in 1941:

The Constitution of the United States does not give the banks the power to create money. The Constitution says that Congress shall have the power to create money, but now, under our system, we will sell bonds to commercial banks and obtain credit from those banks. I believe the time will come when people [will] actually blame you and me and everyone else connected with this Congress for sitting idly by and permitting such an idiotic system to continue.

Beating the Banks at Their Own Game

Issuing “zero-coupon non-marketable perpetual bonds with no maturity date” is obviously sleight of hand, a convoluted way of letting the government issue the money it needs in order to do what governments are expected to do. But it is a necessary charade in a system in which the power to create money has been hijacked from governments by a private banking monopoly engaged in its own sleight of hand, euphemistically called “fractional reserve lending.” The modern banking model is a magician’s trick in which banks lend money only a fraction of which they actually have, effectively counterfeiting the rest as deposits on their books when they make loans.

Governments today are blocked from exercising their sovereign power to issue the national money supply by misguided legislation designed to avoid hyperinflation. Legislators steeped in flawed monetarist theory are more comfortable borrowing from banks that create the money on their books than creating it themselves. To satisfy these misinformed legislators and the bank lobbyists holding them in thrall, governments must borrow before they spend; but taxpayers balk at the growing debt and interest burden this borrowing entails. By borrowing from its own central bank with “non-marketable perpetual bonds with no maturity date,” the government can satisfy the demands of all parties.

Critics may disapprove of the helicopter money option, but the market evidently approves. Japanese shares shot up for four consecutive days after Abe announced his new fiscal stimulus program, in the strongest rally since February. As noted in a July 11th ZeroHedge editorial, Japan “has given the world a glimpse of not only how ‘helicopter money’ will look, but also the market’s enthusiastic response, which needless to say is music to the ears of central bankers everywhere.” If the Japanese trial balloon is successful, many more such experiments can be expected globally.

_________

Ellen Brown is an attorney, Founder of the Public Banking Institute, and author of twelve books, including the best-selling Web of Debt. Her latest book, The Public Bank Solution, explores successful public banking models historically and globally. Her 300+ blog articles are at EllenBrown.com. She can be heard biweekly on “It’s Our Money with Ellen Brown” on PRN.FM.

Cross posted from Web of Debt

The post Japan’s “Helicopter Money” Play: Road to Hyperinflation or Cure for Debt Deflation? appeared first on P2P Foundation.

From 2000 to 2003, Karatani attempted to create a ‘constructionist’ movement, not unlike what the P2P Foundation is attempting to do. But I think his strategy was not integrative, i.e. he saw this construction of the new economy as opposed to traditional mobilization, and I believe this is a mistake. Constructionist and resistance movements need each other.

Here’s an assessment of the NAM experience, focused on its explicit ‘exit strategy’ from capitalism, and its critique of traditional mobilizations, excerpted from Carl Cassegard:

“In what sense did Karatani concretely present NAM as using a vehicle for “exit”? I will focus on four instances – the rejection of confrontation in favour of “exscendent” counter-acts, the ideal of impersonality, the advocacy of lottery, and Karatani’s concept of the “public” – taking his works during recent years, NAM’s program, pamphlets, interviews and other texts concerning the movement as my material.

(1) To overcome the limitations of previous protest movements, Karatani proposes a combination of strategies that are “immanent” (naizaiteki) and “exscendent” (choshutsuteki) in relation to the capitalist economic system (or a combination of voice and exit to use Hirschman’s terms). The term “exscendent” is a neologism explained to mean “exiting and transcendent”.

The immanent counteracts would include consumer boycotts and labor strikes, i.e. direct confrontations waged by consumers and workers participating in the capitalist system. However, NAM itself never engaged in such immanent counter-acts, instead devoting almost all its efforts to the exscendent or external counter-acts. By this Karatani means activities outside the capitalist system. From the outset NAM was launched as the germ of a future society that would gradually replace the existing capitalist society, even if it required “several centuries”. In particular he places his hope in the non-violent growth of alternative non-capitalist economies that could also function as safety nets for activists and groups disadvantaged within the capitalist system (Karatani 2000, 2002:208f, 2003:24f, 300ff). NAM’s exscendent activities included the establishment of an alternative school in Osaka for school-dropouts. Its aim was not to help dropouts back to school but to redirect their “exits” towards non-capitalist forms of schooling and was explicitly modeled on Murakami Ryu’s novel Kibo no kuni no ekusodasu (Yamazumi 2001:254). This emphasis on excendent counter-acts meant that NAM was never intended to function as a protest movement, but rather was a form of social experiment, functioning as a forum for studies and discussions and focusing on cultivating long-term utopian projects.

The avoidance of violent confrontation is an attempt by Karatani to overcome the historical legacy of “defeat” among anti-systemic movements. Thus he criticizes traditional Marxism for remaining stuck with an old-fashioned idea of revolution based on the violent street riots of the bourgeois revolutions of the 18th and 19th centuries. The “counter-action” or “counter-acts” (taiko) of NAM cannot be modelled on traditional violent revolutions.

Since the Puritan Revolution, bourgeois revolutions have always involved violent acts. Even some socialist revolutions have been violent. However, that is only because they occurred in countries where the bourgeois revolutions (read sweeping of feudal remnants) or the formation of the nation-state had not yet been completed.

Still there are many regions on earth where violent revolution is necessary. It is unjust and pointless for bourgeois ideologues to criticize this type of revolution. They are oblivious to their own pasts. But the point I want to make is that what abolishes – not just regulates – the bourgeois state (capital / state amalgamation) is no longer the violent revolution. I would call this other movement a counteraction rather than a revolution (Karatani 2003:344)

Karatani’s rejection of street uprisings and demonstrations also implies a rejection of the tactics used by the protest movements of the 60’s (ibid 2003:285). His relationship to those movements, in which he himself took part as a student, is complex. He is critical of those intellectuals who call for a repetition of “1968” today and instead stresses the need to break out of the “sterile cycle” of failed protest which he sees in Japanese history. Here he implicitly draws on Freud’s idea that a traumatized patient who fails to verbalize the loss will instead be forced to act it out symptomatically and “repeat” it. By rejecting romantic protest, Karatani appears to call for a proper “working through” of the trauma of defeat in order to bring about a genuine recovery (ibid 2005).

Like Yoshimoto, then, Karatani stresses the need to recognize the experiences of the 60s as a “defeat”. To him, however, that does not mean that efficacious social movement activism cannot be pursued. It is not political activism as such that has been discredited, only the tactics of public confrontation.

(2) The central project among NAM’s exscendent activities was the so-called Q-project, the establishment of LETS (Local Economic Trading System) that would bypass the official monetary system of Japan using an Internet-based electronic currency called Q. The idea of LETS was initiated by Michael Linton in Canada in 1982 and gained popularity in Japan in the late 90’s. LETS resembles a system of reciprocal gifts, since the currency is freely issued by the purchaser at the time of buying. As soon as a transaction is made, the amount is subtracted from the account of the seller and added to the account of the buyer. The seller thus immediately gets his or her money, while the “minus” post of the buyer represents his or her “debt” or commitment to the LETS-community.

The Q-project – which was based on the theories of Nishibe Makoto, an economist from Hokkaido University – started trading in 2001 and today survives under the name LETS-Q . It stands out from most other LETS through its use of an Internet-based currency and its clear aim to create an alternative to capitalist society. One advantage of Q over the official national currency, Nishibe points out, is that it is not issued by the central bank, but by the “workers-as-consumers” themselves. It therefore works as a countermeasure against social exclusion and helps local initiatives in times of scarce capital. Moreover, since there is little point in accumulating Q for its own sake, Nishibe hopes that it will create a new form of market in which money won’t become a “fetish” or turn into what Marx called “capital”, a means of generating surplus value. Finally, since it allows a mixed use with the national currency, Nishibe believes that it will be able to grow gradually, without needing to replace the capitalist market at once with a full-scale non-capitalist economy (Nishibe 2001).

Karatani’s endorsement of the Q-project reflects his wish to revive exchange mechanisms that resemble the gift economy of small-scale communities, but without their parochialism. Since electronic currencies can extend over large areas, the transactions would – he hopes – eventually become just as impersonal as in a capitalist market.

“The death of the capitalistic market economy”, he stresses “is not the death of the market economy” (Karatani 2004:456).

To Karatani, the potential “market-like” impersonality of Q was one of its chief advantages. To understand why, we should recall that he has long criticized older Leftist movements for hewing to the idea of a community to which even critics must belong and to which they must address their criticism. “Even those who criticize […] class-society imagine a beautiful community in which people are mutually dependent and help each other” (ibid 1989b:235).

For NAM to break the hold of this idea, it was important to grope for some more impersonal form of association. As mentioned, already in the 80’s Karatani started to conceive of the market as an “intercrossing” space existing in-between communities and constituted by the interaction between “strangers”. Such impersonality now became the ideal of Q, and even of NAM as such. Associations, he states, are based on contracts between mutual strangers, just like transactions in the capitalist market (Karatani & Sakabe 2001). Through such “market-like” traits, associations like NAM would be able to outgrow capitalism by utilizing tendencies within capitalism itself.

Modeling associations on the market economy, Karatani can be said to mimic the tendency to privatization typical of capitalist markets. Already in Yoshimoto, we saw a defense of the masses’ right to indulge in private pursuits.

What is new in Karatani is the attempt to incorporate this pursuit into the modus operandi of a social movement.

The counter-acts against capitalism become possible not by denying privatization and resurrecting the sense of community and solidarity, but by harnessing privatization to the goal of fostering a new economy. The “solidarity” and “common aim” so often stressed as defining features of social movements (e.g. Melucci 1996) are downplayed in favor of a respect for the participants’ privacy. An illustration of this is Karatani’s statement that the motive for joining Q is irrelevant – “it’s fine if people join for personal gain”. What is important is not the moral or idealistic reasons that drive people to participate, but the growth of alternative systems as such (Karatani 2002:207, Karatani & Suga 2005:209).

(3) In NAM, lottery was introduced in the final stage of elections to the central board. Lottery, Karatani argues, helps prevent organizations from constricting individual freedom (Karatani 2003:306). To explain, we need to turn to some of his older writings. In these he sometimes discusses the difference between liberalism and democracy, which reflects his reading of Carl Schmitt. It is well known that Schmitt criticizes liberalism – a basic tenet of which is the establishment of a system of rights and “checks and balances” to prevent the centralization of power – in favor of democracy, which he defines as rule based on the identity between the ruler and the people. Karatani turns the tables on Schmitt, arguing that what is needed is precisely liberalism. For instance, what protects discriminated minorities is the liberal defense of decentralization, division of powers and human rights, rather than the idea of democracy stressing uniformity and the rule of majorities. Democracy, he claims, easily lends itself to justifying the centralization of power and even the “sacrifice of the foreigner”. The counterpart of the democratic idea of a government “representing” the will of people is the idea of a public sphere in which citizens express their views and become political “subjects”. Just like thinkers such as Yoshimoto, Karatani is suspicious of the latent totalitarianism inherent in such calls for participation, to which he opposes the freedom to withdraw and not to be a “subject”. The freedom to keep silent, he argues, may be more important than the freedom of expression (ibid 1999:128f).

As an example, he mentions Athenian democracy, which he believes was made possible not only by the freedom of speech but also by voter anonymity, which protected the weak from having to confront the powerful. Equally crucial in preventing the emergence of dictators was lottery. With a few exceptions such as military commanders, magistrates and jurors in Athens were not elected but appointed by lottery. Lottery, however, is an element missing in contemporary democracies, which in Karatani’s view still leans towards the Schmittian idea of democracy as an organic totality joining leader and people through the fiction of “representation”. Lottery helps deconstruct this fiction by introducing contingency in the election process. To avoid the fixation of power, Karatani therefore advocates the use of lottery not only in NAM, but also in the state and in companies, parties, unions and other organizations (ibid 2002:118; Karatani & Suga 2005:191).

Here we can observe two things. Firstly, in designing the organizational structure of NAM, Karatani puts priority on the freedom to withdraw and keeping ones anonymity rather than creating a sense of community or togetherness by participating in the public. Secondly, we can see that his proposed system of lottery bypasses “communicative action”. Contingency, or chance, is introduced in a way that replaces the public debate that is usually thought to be the lifeblood of the public sphere. In both of these respects, NAM takes leave of the strategy of “voice”.

(4) We have seen that Karatani in various ways champions the right to withdraw from participation in various arenas of mainstream society. The “exits” that NAM aimed at did not, however, imply a return to private space. Neither did NAM seek to participate in the public sphere in the conventional sense. To what, then, did NAM try to exit?
Karatani’s answer to this question can be found in Transcritique, where he uses Kant to change the meaning of “public”. The “public” should not be understood as linked to existing communities, but as a space where we encounter others who follow a different set of rules. In What Is Enlightenment? Kant defines the public use of reason as the use anyone can “make of it as a man of learning addressing the entire reading public”, while the private use of reason is more narrowly restricted to the use “a person may make of it in a particular civil post or office”. As Karatani remarks, this definition inverts the usual meaning of “public” and “private”: “In common usage, ‘public’, as opposed to ‘private’, is uttered at the level of community or nation, but Kant considered the public in this sense to be the private domain” (Karatani 2003:101). From a Kantian viewpoint, then, the “public” cannot be equated to the existing mainstream “public sphere” of national communities like Japan. It is not immanent to any “system”, but always transcends borders – or as Kant puts it: the public use of reason is that made by a person who considers himself a member of a Weltbürgerschaft, as a world citizen.

What NAM aimed at was to venture out into a “public” in the Kantian sense. In Karatani’s usage this is the equivalent of transcritical space: a space located in-between communities and, like the market, functioning as a place of intercourse for strangers. Since this is a place where no common rules or norms can be presupposed, it is better thought of as an indefinite space to which one exits than as an existing arena which one joins or to which one belongs. “Being public” is not about participating in institutionalized forms of interaction but about exiting to a space where the “singularity” of the individual is not constricted by the community. “In a community, being individual is deemed being private […]. For Kant, however, being individual is equivalent to being public – in the cosmopolitan sense” (ibid 101).

As we saw in Yoshimoto and Maruyama, the “private masses” are often set up in opposition to politically or publicly engaged “citizens”. Karatani’s concept of the public avoids both of these categories. It has less to do with voice – free and open discussions among politically engaged “citizens” – than with exit, but this exit differs from that of the politically disillusioned “masses” in being a political counter-act intended to help break open the “trinity of capital, nation and state”. As Hirschman (1970) points out, voice is often a collective activity that tends to be preferred in the sphere of politics, whereas exit is typically a private and silent option employed in the market. By portraying exit as a political and “public” manifestation, Karatani calls the usefulness of the common separation between political voice and apolitical exit into question.

Is a social movement for exiters possible?

The picture emerging of NAM is of an organization aspiring to exit on two levels. On the one hand, we find passages evoking a collective exodus from mainstream Japan. On the other hand, in the downplaying of inner solidarity and commitment, the stress is on individual exit. Although NAM as a whole aimed at an exit from capitalism, it also promoted a prior, partial disengagement of individual members from the very idea of togetherness. Even within NAM the ties between members seem to have been weak and impersonal, “like in a market” to quote Karatani. In both of these respects, NAM can be said to represent an attempt to establish a social movement that would be attractive to those disillusioned with “participation” in the mainstream public as well as with the “inner solidarity” stressed in many earlier movements. It was Karatani’s answer to how a movement could satisfy the need of withdrawal and nevertheless have corroding and subversive effects on contemporary systems of control.

However, there is a tension between the two levels. NAM was supposed to function both as a movement and as a shelter or sanctuary from mainstream society where members could feel secure in their privacy and no one demanded that they identify with the movement. To be convincing, the rhetoric would need to portray a strategy of resistance that could be realistically employed even by those who have given up participation in the mainstream public sphere, the traditional arena of social struggles. Simply withdrawing from political participation in order to go along with private pursuits may be the first step to “autonomy” for Yoshimoto, but from Karatani’s perspective it is not enough since it fails to break out of the “trinity of capital, nation and state”. What is needed is to provide an alternative arena to which exit can be redirected. To Karatani, this arena was economically modeled on the idea of LETS and politically on the idea of an alternative, Kantian “public”.

The tension in Karatani’s rhetoric stems from the fact that it is far from clear how such redirection would occur.

Those who withdraw from the mainstream social order in search of a shelter are not necessarily those who engage in a movement for constructing alternative arenas – the former may well view participation in movements as well as futile. The tension in NAM’s rhetoric points to a deeper difficulty or dilemma in the rhetoric, which seems to revolve around the question whether movements relying on exit rather than voice are really viable.

Karatani is not the only proponent of the rhetoric of exit who is struggling with this problem. From a different angle it also appears in Michael Hardt and Antonio Negri, two prominent advocates of exit in today’s alter-globalization movement. Before returning to Karatani, it will be instructive to look at their attempts at a solution. Their version of the rhetoric centres on the claim that “desertion” and “exodus” are the most effective ways to offer resistance to the newly emerging system of global governance which they call “Empire” (Hardt & Negri 2000:212). By these terms they understand an evacuation of the sites of power, which is non-recuperable from the standpoint of capital or power. But what do the terms mean concretely? In Empire (2000) the main examples of desertion and exodus are refugees, migrant labour, escaped slaves, and the mass-emigrations that triggered the fall of the Berlin Wall. Resting on a myriad of individual decisions – a “diffusion of singularities” – rather than organized movement, the effect of these desertions is said to be to silently weaken the system of power, undermining it rather than fighting it. This is an idea that Virno has put succinctly: “The State will crumble, then, not by a massive blow to its head, but through a mass withdrawal from its base, evacuating its means of support” (Virno & Hardt 1996:261f).

As critics have pointed out, however, the question of whether migrants and refugees qualify as an effective countermovement against Empire is left unexplored. [16] In Multitude (2004) and other recent texts the concept of exodus tends to be broadened into a metaphor of resistance as such, including voice and public confrontation.

Simultaneously, the central image illustrating the concept shifts to the mass-demonstrations of the alter-globalization movement in Seattle and Genoa. The result of these changes is that the concept becomes more confrontational – what is needed is not simply to abandon or “undermine” power by depriving it of participation and support but actively to turn against it and topple it, through “a blow to its head” to use Virno’s words. This vacillation indicates a basic unresolved dilemma. The more they stress the undermining effects of the withdrawal of various subaltern groups from imperial control, the thinner the link to organized resistance becomes. Conversely, the more they connect their theory to the present surge in anti-corporate and anti-war activism, the more its empirical content tends to merge with the traditional movement repertoire of voice and public confrontation.

In comparison with Hardt & Negri, Karatani’s concept of exit is less mixed with elements of voice. As in their writings, the act of exit and the construction of a new society are conceived of as one and the same process. To Karatani, however, the idea of “exscendent counter-acts” is more than a “diffusion of singularities” and it is never used as a mere metaphor. The “trinity of capital, nation and state” must be undermined by the construction and gradual growth of alternative economic systems and the increasing flow of “exiters” to these alternatives.

Karatani is therefore never tempted to portray exit, or “exscendent” counter-acts, in a way that makes them resemble the use of voice or public confrontations typical of classical social movements. Cultivating the project of an alternative economy is more important than rebelling or confronting mainstream society. The way he combines the rhetoric of exit with movement activism is therefore entirely different from what we see in Hardt & Negri.

Instead of transforming the content of exit into that of voice, he attempts to conceive of a social movement that is capable of being efficacious without operating with voice.

Karatani’s solution is not free from difficulties. He appears to imply that people simply pursuing their private concerns within a frame like NAM will give rise to a self-organizing process which will erode capitalism. “When bright minds start pouring into non-capitalist modes of production, capital is in for trouble” (Karatani & Murakami 2001:77). Here Karatani appears to view the exiters as acting from a position of strength. There is no need to directly confront capitalism, since exit alone will result in a devastating “brain-drain” which will sap its strength. This may appear overly optimistic in retrospect. Apart from the fact that such movements have so far met with very limited success in Japan, they are also weakened by the fact that they lack part of the attraction of traditional movements.

For example, against Karatani’s criticism of the street-fighting of the 60’s, the literary critic Suga Hidemi defends them for the “fun” and the human contact they brought:

I wonder if movements really can continue if such pleasure and fun is lacking. Of course, I believe you are correct when you say that a genuine revolution is when seemingly insignificant changes happen without people noticing and the effect is only retrospectively recognized. But how about the fun of crashing into and shouting at people around you in the process of reaching that goal? (Karatani & Suga 2005:204f)

The price for Karatani’s solution is a diluted concept of social movement. As we have seen, NAM lacked many of the features normally associated with social movements – internal solidarity, confrontations with adversaries, and an overall sense of solidarity with the surrounding society. While NAM proved the possibility of movements using the strategy of exit, the question of the viability of such movements remains in doubt.

Why did Karatani advocate exit as a strategy for movements despite these difficulties? In order to understand this, it is important to pay attention to the continuity relating Yoshimoto and Karatani. This continuity is the legacy of the “failure” of the 60’s. Thanks to this legacy the following dilemma appeared: how could one affirm the right of people to withdraw from politics and yet keep up appearances that one is somehow confronting or resisting power? Being designed as a movement suitable for those disillusioned with politics, commitment and solidarity, NAM can be seen as an attempt to answer that question.

NAM’s legacy and the recovery of voice

In the aftermath of political defeat in the 1960 Ampo struggle, Yoshimoto developed the idea that the exit of “privatized” masses from public involvement did not mean the death of the radical project but represented a new form of challenge to the system. A second watershed in the rhetoric’s development occurred with the renewed upsurge of protest in the late 90’s, when Karatani advocated exit as a strategy for social movements. Despite the differences between the two thinkers – to Karatani it is not the privatized masses as such that threaten the system, but rather movements like NAM that help redirect withdrawals to a Kantian “public” or transcritical space – both see exit as a form of resistance.

I have argued that neither thinker is entirely successful. Yoshimoto’s “masses” do not appear to threaten the present system of “super capitalism” and the possibility of exiting the “trinity of capital, nation and state” through a movement like NAM appears doubtful. Hardt & Negri’s alternative attempt to combine the rhetoric with movement activism by letting terms like exodus include voice and confrontation likewise fails to address those who are disillusioned with such strategies.

With the anti-war movement in 2003 and today’s movement against “precarity”, voice in the form of street demonstrations and street parties has made a recovery among young people in Japan. “Precarity” is a term used to refer to the insecure employment conditions of irregular workers, such as “freeters”, part-timers, dispatch workers or day-laborers. Originating in Italy, it was introduced in Japan in 2005 through the activities of the NPO Remo in Osaka (Sakurada 2006) and popularized by the writer Amamiya Karin (2007) and the General Union for Freeters (Furita Zenpan Rodo Kumiai). The rhetoric of exit may appear to play no role in these movements, but they do share Yoshimoto’s and Karatani’s rejection of tightly knit and hierarchical organizations, their respect for privacy and heterogeneity, and – in the case of the “precarity” movement – their attempt to reach out to marginalized groups such as homeless people, NEETs and social withdrawers. It is interesting to note that several prominent activists and writers in the “precarity” movement – such as Asato Ken, Sugita Shunsuke, Settsu Tadashi, and Yuasa Makoto – are former members of or cooperated with NAM. Despite its own intentions, NAM may have contributed to the blossoming out of today’s voice movements, if not through its rhetoric then because it provided a place for ideas to be exchanged and contacts to be made. In that sense, even if the exits it promoted never constituted effective resistance, they were at least a prelude to resistance.”

Photo by andrewmalone

The post Movement of the Day: The exit strategy of the New Associationist Movement appeared first on P2P Foundation.

7. Freedom Isn’t Free

PN: Let’s talk about technology. In terms of administering a shared goods-and-services system, the internet might be a good match. But it also seems that the internet, and machines and technology in general, can stand in place of actual relationships, and can be a stumbling block. How do you negotiate between those ideas?

DR: The word that describes digital for me is discrete. For example, take sounds. With an actual sound, no matter how hard we zoom in, it’s still a real thing. There’s still more fidelity, more information to be found. If I scan or sample it, I’ve now translated that sound in the real world into a number. Something that was an event, in nature, in the world, is now a number. It’s a derivative of reality. That number encapsulates as many metrics and as much information about the sound as I’m capable of including, and I can then make copies of the number and manipulate them. So there’s greater choice in that way. But the only things the number can reproduce about that sound are the things I’ve told it to reproduce.

PN: It only knows what it’s supposed to measure.

DR: The reproduction process also involves a sampling rate, which necessarily leaves stuff out. Even if the sampling rate is so good, so super-mp3, that it’s beyond my conscious hearing, there is still space between the samples. Just like a fluorescent light; there’s space between the flashes.

Now the question is, for all intents and purposes, is it the same, or not? I would argue that formany intents and purposes, it is the same, but for all intents and purposes, it is not. It is a re-creation of a thing, and an approximation, and without even getting spiritual and talking about prana and chi and everything else, there is a difference.

In high school when I needed to do a research project, I would go to the library to find a book. I couldn’t help but see the 20 other books on the shelf nearby, I had to read 20 spines before I found mine. And in reading those 20 spines I would see stuff I wouldn’t have found otherwise, and I might get ideas for my paper randomly — not by predetermined choice. I would see them by virtue of the fact that some librarian who was alive before me made a decision, by virtue of legacies and input and real life messiness. Whereas when I’m in the digital realm and I know the book I want, I type it into Google, and it’s there. And nothing else.

PN: This discrete freedom of choice sounds like a very controlled environment.

DR: Right, what are my range of choices? And who’s giving me that range? People are utterly unaware of that. So when I look at technology I say well great, people have the ability to write online, but they don’t, most of them, have the ability to program. In other words we can enter our text into the little blog box, but we aren’t thinking about the biases built into a daily blog structure, which are towards short, daily thoughts, not introspective . . .

Or look at online communities. I’m going to become friends with another person who owns a 2004 red Mini with a sunroof, like mine, rather than with my neighbor who happens to have a different car; I’m going to look for that perfect affinity. But that’s not a real relationship, that’s my digital relationship, which is discrete! Discrete communities end up groping towards conformity of behavior really quickly.

That’s why it’s a consumer paradise, because it really does celebrate the idea of increasingly granular affinity groups, increasingly granular product choices.

8. The Derivative Life, An (Un)Reality Show

PN: An over-arching theme I found in the book is how the common-sense stuff of our reality, the economy and money and shopping and working, is really science fiction; we don’t live inside a “natural” economic structure — we made it up.

DR: It gets very much like Baudrillard in a way. We lived in a real world where we created value, and understood the value that we created as individuals and groups for one another. Then we systematically disconnected from the real world: from ourselves, from one another, and from the value we create, and reconnected to an artificial landscape of derivative value of working for corporations and false gods and all that. It is in some sense Baudrillard’s three steps of life in the simulacra.

So by now, as Borges would say, we’ve mistaken the map for the territory. We’ve mistaken our jobs for work. We’ve mistaken our bank accounts for savings. We’ve mistaken our 401k investments for our future. We’ve mistaken our property for assets, and our assets for the world. We have these places where we live, then they become property that we own, then they become mortgages that we owe, then they become mortgage-backed loans that our pensions finance, then they become packages of debt, and so on and so on.

We’ve been living in a world where the further up the chain of abstraction you operate, the wealthier you are.

9. The Way Out

PN: So since this is a system we created, can we create something else?

DR: Right, that’s what open-source was supposed to be about. I believe that every realm of human experience and design is ultimately open-source if we choose for it to be. That’s why I got interested in religion and money, because those seemed to be the two areas that people would not accept an open-source premise. Religion — of course it isn’t, those are sacred truths! But I would argue that Judaism was actually intended as an open-source religion. I’ve written a book about that, called Nothing Sacred, which was and still is controversial. Because if the Torah is open for interpretation, if it’s this beautiful, myriad, hypertextual, hyperdimensional document that it is, then the whole thing is up for grabs: what happens to the real estate, the Israeli state?

Money of course is the other big area, it’s still the one thing they won’t let you print.

PN: You’ve seen the dual currency idea from the Middle Ages coming back in certain places?

DR: We’ve seen it coming back for 10 or 20 years now in places like Ithaca, New York, and Portland, Oregon; little places with alternative communities and hippies and weirdos and Grateful Dead parking lots and things like that. They could try local currency because people were weird enough to go for it.

More recently, after the economic downturn in Japan, dual currencies started to take hold in the non-”alternative” community. Everyone had time, but no one had money. Everyone was willing to work, but there were no companies they could work for. And since the only way we know how to work is to outsource our employment to a company, things looked bad.

One of the main needs people had was getting health care to their grandparents and great-grandparents who lived in towns far away. No one could afford home health care for them — people to bathe them, walk them around, give them their shots, their IVs, their bedpans. So if you can’t afford the service what can you do? What they did was set up a non-local complementary currency system where you would volunteer a certain number of hours of work to take care of an old person where you lived. You would acquire credits, and then someone who lived near your grandparents would take care of them for the credits you paid. There was no money involved! The currency was literally worked into existence. Even after the economy improved and people got their health insurance back, old people preferred the health care workers who were coming from the real people rather than the ones that came from the companies.

Now it’s starting to hit places in the US where things are especially bad — Detroit, Lansing, Cleveland — these are towns that have resources in people, land, old factories. They have time, they have energy, but they don’t have money and they don’t have any corporate interest. So what can they do? Make a local currency, start doing things for each other. I’ll fix your car, and you do something for me.

Promoting bank-lent businesses is basically saying that you don’t believe in sustainable business models yet. Any business that started with the bank is not a sustainable business model, because it’s already in the debt/interest track. This is where Obama is still confused. He should say,“Look, I realize the economic crisis is real, there are mortgages and loans and we’re going to work on that. But the more important thing right now is, rather than spending $5 trillion of your great-grandchildren’s money on these bankers that screwed up, let’s see how can we spend a teeny bit of money and reeducate communities about real economic development and sustainability.”

And it’s easy! When I talk to economists, or when I talk to bankers, they all say, “well that doesn’t work, you need a bank to go in and invest in a community for it to happen.”

Actually — you don’t. You don’t need the bank.

Read more recent Douglas Rushkoff:
Think Occupy Wall St. is a phase? You don’t get it.
Occupy Wall Street beta tests a new way of living.
Are Jobs Obsolete?

Read related essays on HiLobrow:
Rushkoff on HiLobrow.
#longreads on HiLobrow.

Additional resources:
Niall Ferguson, The Ascent of Money
Adam Curtis, watch All Watched Over By Machines of Loving Grace on the Internet Archive

The post Douglas Rushkoff on the space between samples, derivatives and the way out appeared first on P2P Foundation.

From our friends at The Extraenviromentalist Podcast.

From the episode notes:

The catastrophe at Fukushima presents the opportunity to re-evaluate basic assumptions about energy and technology but the temptation to double down on business as usual becomes incredibly strong. Will our species obtain a paradigm shift in the face of an energy emergency? Could we create new models for business that regenerate ecological functions rather than destroy the planet?

In Extraenvironmentalist #66 we speak with Michael Stone and Ian MacKenzie about their new film Reactor which covers their recent trip to Japan. Is the social fallout from Fukushima a template for social change elsewhere? Then we speak with Willem Ferwerda of the Ecosystem Return Foundation about scaling up the ecosystem restoration techniques we discussed on XE #65 with John Liu. We talk about the potential for regenerating ecological functions through new models for business and investing. Can we develop a process for launching permaculture businesses around the world?

The post Podcast of the day: The Extraenviromentalist: Changing Reactions. appeared first on P2P Foundation.