July 31, 2005

The Favour Economy - Pressed Flowers get Laminated

In the world of community currencies, Pressed Flowers have resiliance. To my continuing surprise, the humble floral unit has legs! Last night, under the add-on, flowers were reserved, catalogued and most importantly traded.

Some months ago the Vienna artists' community took children to the hills near Baden to collect flowers. These were pressed in the sleeves of books and a more crude version of a flower press awaiting tonight's events. Now, the pressed flowers have been reserved by recording them all and preparing them for distribution.

Yet such a community setting. Overhead in the scaffolding in Wallensteinplatz, a performance by a popular Astrian warbler AustroFred (singing songs by Queen in German. "Under Pressure" sounds like "Amadeus" ...). Underneath, a gang of artistic financial cryptographers catalogued and laminated hundreds of pressed flowers. They are now official floral reserves of the FlowerBank.

This crazy little thing called trade. A dance group was paid in pressed flowers. Their dance presented flowers to the audience, and each audience participant was encouraged to take the fresh flower and bail it in to the FlowerBank for pressing and future conversion for more liquidity.

Pricing the laminated pressed flowers was an issue that wasn't resolved beforehand. After the performance (and flower bank revitalisation) a lengthy negotiation meandered between the supply factor of time for complete flower pressing in volunteer labour (about an hour) and the investment of the performers (about 2 hours each). Eventually, trading parties settled the price at PF8, or PF2 per performer.

(The rain started but nobody cared. The wind blew the stock of reserves around. Pandemonian, but ... The show must go on!)

This is Europe so the kids are out on the streets until the early hours. At least, this was the Turkish community. Keeping children focused turned out to be a simple matter of pure bribery (anything for sugar). In exchange for writing out the leaflets describing the terms of trade, flowers were paid and kids were well behaved, for once.

The reserve units were accepted for meals and icecream and I converted my wages in laminating into a dinner of fried meat, noodles, basil, and peanuts. Delish! A plate cost PF2 and icecream only PF1 although there was some debate about that.

In the event, the flowers economy all went to pot. Some insisted on keeping their flowers and forewent the benefit of the further trade. Kids on the other hand raided the local park for flowers, traded them in for precious reserves and then traded those for meals but not the icecream. Snip, snip, snip. Another myth bites the dust.

It gets more Austrian. Rumour has it that one of the kids, Nenad of age 10, has responded to the critical shortage of flowers and has started his own bank with pressed leaves. Already adults are speculating on when pressed insects will emerge, and the rate of exchange between leaves and flowers.

Opinion aside, the essential metaphor here is a 'favour currency' which records our good deeds. This is a soft issue in that it really doesn't matter if we get the exchange rate askew or the float adrift. What matters is that the system supports the actions - when a favour is paid for, it stays paid. When it isn't paid, the system does not get in the way of denying people's intent to avoid a direct recording of the event.

Posted by iang at July 31, 2005 04:44 PM | TrackBack

Nick Szabo writes in "Shelling Out," an interesting essay on the origins of money:

"The need to remember faces and favors is a major cognitive hurdle, but one that most humans find relatively easy to overcome. Recognizing faces is easy, but remembering that a favor took place when such memory needs to be recalled can be harder. Remembering the specifics about a favor that gave it a certain value to the favored is harder still. Avoiding disputes and misunderstandings can be improbable or prohibitively difficult."

Posted by: Shelling Out at August 3, 2005 06:16 AM

This afternoon I finished reading "Shelling Out" linked above and it has a *lot* to say about this subject. As usual with Nick's stuff it is long, and took 3 or 4 hours to read, but it wasn't so hard for anyone with a monetary background. Definately a critical contribution to understanding where we are going here...

Posted by: Iang at August 3, 2005 04:55 PM

" On a larger scale, the Laffer curve may be the most important economic law of political history." Good to know that all that scholarship on the rise and fall of the Roman Empire was just wasted time. And the implications about the fall of the Soviet system and the importance of IT in Castell's three volume opus can be dismissed in a line about, excuse me, the Laffer curve.

Seriously, no, don't read that post. "The History of Money" by Weatherford is much better, and as a bonus that which he says about the use of tobacco as currency tends to be correct. I kind of liked "Paying with Plastic" by Schmalensee because it encouraged me to appreciate how impossible a construct the credit card industry is by detailing the unlikely moments of its history. Of course, the book ignores any ugliness, like Truth in Lending testimony or Walker Bank & Trust v. Jones.

But really, really, don't read that article. It even misses important elements in the funny stories, like the role of beads and tobacco.


Posted by: L Jean Camp at August 5, 2005 02:12 PM
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