In a minute I will describe the basics of Fluidity, things that will be useful if you are ever about to use the system.
First I will just briefly describe a little of the rationale behind this particular system design.
The comments here are relevant to those countries that have sophisticated transaction systems in place, such as swipe cards, fully automated and digitised interbank transfer systems, significant uptake of Internet and smartphones. Fluidity can also be adapted to regions and countries where such systems are less available and such uptake is lower. That will be the topic of another blog on this page.
Everyone facing forward (with their eyes open) knows that the economic system is in need of an overhaul. That has been endlessly debated. What few have come to is the design of that which can manage this transition.
We need to stop using resources as if there were no tomorrow. (Because we want one.)
We need to stop practices that damage ourselves, each other, other forms of life, the environment.
We need to shift from unconscious practices to ones that are mindful, helpful and practicably beneficial.
The economy we have inherited in some ways is "non designed". Why do I say this? Well in design, you appraise the need and then you create the design that will best fulfil that need.
Can we say that the global economy, comprising the national economies of the world, does that? Seen as a design approach, does it fulfil the needs we have?
Does it feed people?
Does it clothe and house them?
Does it provide jobs?
Does it allow people to live in security - physical, societal, employment security?
Does it protect what is precious?
Does it reward good practices, without rewarding bad practices?
Does it encourage everyone to do the right thing, by incentivising them clearly and strongly to do so?
Does it provide hope and meaning?
Does it leave the world better today than it was yesterday?
If not, why not?
Who makes human systems?
Humans.
Who can improve, fix or change those systems?
Humans - us.
Is there anything preventing us from doing so?
No.
Ok, I'm glad we got that out the way.
So, to address the theme of this post...how does Fluidity work?
Almost all of us are dependent on the current system. However dysfunctional that it is, which one of us does not depend on it. This fact means that we cannot transition overnight to something better. We need a system that manages this transition.
One of the principles of Nature is that when there is a massive change to engineer, it is best done at the smallest possible scale. This reduces stress and maximises opportunities.
The smallest scale, in economic terms, is the single transaction. That's the first point.
The second point, mentioned above and elsewhere, is that we have tools at our disposal today that we did not have in the past. Namely: big data and the possibility of digital currency.
Thirdly, because we cannot throw the current system away overnight, and we can/need to transition it one transaction at a time, it is very logical to use a digital currency to merge with the present currency in any country, and this be used to improve and transform that currency and by implication economy.
If your goal is to transform an economy and make it fully sustainable (see for example Dame MacArthur's
circular economy focus), then that economy first needs to be strong enough to be subjected to such a transformation. Evidence for this (see for example Maslow's Hierarchy of Needs) is that if people are in survival mode, scrabbling around in hyper competition and debilitating anxiety, how can they consider improving life for people who will be born five generations from now?
Eat first, then talk. Or as the Haitian expression says,
Empty stomach has no ears.
Economies must be strengthened - which often can be considered synonymous with
stabilised - before they can be transformed. So, referring to our design brief, the needed system must begin by stabilising the economies of the world. But it can't stop there. GDP as it currently stands is a highly confused metric. Economic activities that serve humanity and life appear on the same balance sheet as those that damage life, livelihoods and ecosystems. This is the hardwired faulty thinking that creates so much chaos and contrast. It is time to unwire it.
In a later post I will talk about how Fluidity addresses social and environmental outcomes. For the rest of this post, I will focus on the basic dynamics that make a Fluidity system tick.
People experience economic crisis when resources do not flow. The first of our two goals is to stabilise the reliable flow of resources through an economy (always remembering that we will transform GDP after we have stabilised it flow). GDP is not a measure of how much money is in an economy! GDP is a measure of how much that money is flowing through the national economy.
It is like miles per hour. GDP is a rate. it doesn't measure stuff. It measures speed.
SO the first goal is to maintain good stable speed, in the economy. Erratic changes in speed leave everyone anxious and in fight-or-flight mode. That does not beget creative, intelligent problem-solving. The goal of Fluidity is to help humanity out of survival mode, as much as anything else.
In other words, the goal is
fluidity of currency (hence the name given to this new system). This can only happen when people want to spend cash/national currency in certain ways, at certain rates.
Fluidity incentivises spending in ways that benefit a) the economy b) society, and c) the environment, over the long term.
Fluidity is an incentives system of potentially astonishing complexity, subtlety and intelligence.
How?
Fluidity offers digital credits to participating buyers and sellers (I am avoiding the nefarious term
consumer because it is not a fitting description of the grandness that is the human soul).
Every transaction that uses Fluidity has a credit component + a national currency component.
Thus any such transaction contains a proportion of Fluidity credits and a proportion of national currency.
This ratio can vary. In fact it is the seller who decides what it will be, in each case.
Upon sale, the credits move to the account of the seller of the product or service.
These credits can then be spent elsewhere.
The buyer participates because she saves money.
The seller participates because she can offer products and services for less money than competitors - and she has a good instinct for how to increase new profit by clever use of promotions, advertising and so on.
Some people will make better use of Fluidity than others. The former will increase profitability. They will have developed best practices. And they will share them with others.
Why would they do so?
Because they will be rewarded for doing so - with very sharp market data. Gleaned (and anonymised) from the world's first use of a truly intelligent digital currency.
So everyone gets better together. The good get better, the best get even better.
Know what this does on a regional or national scale?
A leaner, more competitive, stably growing economy.
Not just that, but the increasing number of data interface points allow the economy in question to be improved in ever more precise ways.
That is when you start adjusting for ecosocial outcomes.
The high intelligence algorithm deployed for Fluidity becomes smarter and smarter at achieving ecosocial outcomes. Just by shifting credit allocation parameters.
Adjustable variables include
- how many credits are allocated, to whom - which companies, organisations, regions and sectors
- how long the credits exist or whether there is some kind of expiration to them (perhaps a staggered expiration)
A further novelty exists in the form of
Accumulation - an interesting topic for a future blog post. Suffice to say that with a digital currency, apart from the zero risk or physical counterfeit (and the need for advanced cryptography), it is possible that the vendor receives more credits in his account than the buyer spent from his own. A kind of quantum leap is engineered into the system, that allows the whole to grow, by extra incentivising product merchants and service providers to participate.
One of the things the increasingly intelligently programmed software will be able to do is determine optimum accumulation ratios in order to incentivise those economic behaviours that represent the longterm greatest good of all - all of human society, all of planetary society.
We have just turned a problem into a solution. And an elegant one at that.
What is the problem with the current and outdated economic system?
Is it perhaps, in a nutshell, that a few individuals are deciding the fate of billions?
Why leave things this way?
With Fluidity we are actually employing everyone to find the best solutions - crowdsourcing the improvement and transformation of the largest shared human-made system on Earth. The one that touches all the others in ways that are so profound.
Fluidity is modelled after nature's ecosystems. Because why not?
