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The CLIME Project



A Radically Beneficial World: Automation, Technology and Creating Jobs for All           Kindle, $9.95         print, $25         Audiobook, $17.46


What if we could have a global system that benefited everyone, rather than just the privileged few?

My book A Radically Beneficial World: Automation, Technology and Creating Jobs for All proposes just such a global system, the Community labor Integrated Money Economy--CLIME--that provides secure wages and positive social roles for everyone who chooses to become a member of a CLIME community group.

CLIME is generated by five self-regulating, decentralized, distributed software engines. The system can only transition from a set of ideas to an actual institution if these software engines are programmed/ coded.

As a first step in this process, I've prepared an initial set of system goals and specifications: one set of system-level specifications and a separate set for each of the five software engines that make up CLIME.

CLIME enthusiast M.W. has created a forum (the CLIME Project) for those interested in contributing ideas and coding to the project. (Registering is easy.)



Specifications of the CLIME system

Summary

This book is the practical blueprint of a new system (Community Labor Integrated Money Economy - CLIME) that offers opportunities for meaningful work and ownership of the sources of prosperity not just to a few, but to everyone.

In CLIME, every individual has the power to change the system for the betterment of themselves and every other participant. Being at the top of the heap is no longer a prerequisite. Everyone who is powerless in the current arrangement is empowered in CLIME. Empowered to not just better themselves and their family, but better their community and the larger community of Planet Earth.

CLIME swings the goal from growth to sustainable living by changing the incentives presented to participants from perverse to positive.

-- CLIME is an opt-in system. No one is forced to participate.

-- CLIME uses a self-funded monetary system that can't be hijacked by the central state, bank or banks, and most importantly, it does not create money via borrowing it into existence.

-- In CLIME, community groups organize work (via inherently messy and disorderly democracy) to meet scarcities rather than rely totally on markets to decide what's profitable/unprofitable. Markets serve a function, but they have fatal limitations.

-- CLIME is 1) a new ontology of work and money 2) a new political system 3) a new economic system, all of which can grow organically because they are opt-in, decentralized and distributed.

-- CLIME is a self-organizing system that strips out privilege (which I define as unearned wealth and power that transfers risk to others).

The Goals of CLIME

1. Create an infrastructure of opportunity (individual opportunities for increasing security, capital and well-being) and a secure income for everyone who chooses to perform work that contributes to the capital and well-being of their community.

2. Provide this infrastructure of opportunity and a secure income for everyone regardless of ethnicity, gender, creed, etc., and without relying on any state or political-financial Elites’ approval or funding.

3. Create incentives (via secure income and opportunities for increasing capital, knowledge and well-being) for contributing work to the community that expands material, human, social and symbolic capital for individuals, households and the community.

4. Organize the work to use best practices that fit the community’s material and social realities.

5. Organize the work to maximize the matrix of needs and leverage, i.e. prioritize the projects so those with the lowest cost in money and labor that produce the highest yield are done first.

6. Enable the sharing of knowledge and capital between community organizations and individuals on a global scale, so both intangible capital (knowledge and skills) and financial capital can be leveraged to increase capital, opportunity, security and well-being (COSWB).

7. Limit privilege by disincentivizing gaming the system, falsification of data, misrepresentation, cheating, corruption and fraud via revoking the membership of groups and individuals who violate the rules of membership.

8. Enable the free movement of individuals and capital between community groups and between the system’s own marketplace and the market economy.

9. Keep the cost of establishing a new community group low enough so that any motivated individual can start their own group to organize work in the community.

10. Protect the system from co-option or coercion by states, banks, local elites, warlords and every other form of centralized power and privilege.


SYSTEM-LEVEL SPECIFICATIONS

1. The purpose of CLIME is to eliminate the want, coercion, exploitation and desperation of poverty globally.

2. CLIME eliminates poverty by guaranteeing all participants a wage for labor performed in service of the CLIME community group that the participant voluntarily joined.

3. The CLIME software does not recognize gender, ethnicity, creed, etc. All members have exactly the same rights and responsibilities within the system, and all groups must obey the same rules.

4. CLIME is a self-organizing, adaptive global system based on a set of simple rules for how the system operates and a set of simple rules all members must follow.

5. The CLIME interface is very easy for new members to set up, navigate and use.

6. CLIME is self-organizing: the software used to manage each community group is open-source and can be installed for free by anyone who wants to establish a qualifying community group.

7. CLIME is designed not just to alleviate poverty, but to provide its members long-term financial security via guaranteed wages, positive social roles in their community, ways to generate surplus income and accumulate capital. CLIME enables the pursuit of happiness for every member.

8. CLIME is a global institution that integrates technological, financial, economic, moral, sociological and political dynamics into a model for distributing productive social roles, opportunities to better oneself, wages and decentralized technologies appropriate to an era of Degrowth.

9. CLIME doesn’t need to oust the elites that currently control money, credit, central banks and the state to operate. CLIME is a global system of economic stability that is independent of the status quo.

10. CLIME brings labor that is currently unpaid and/or unproductive, with limited access to a marketplace, into a regulated, transparent, self-funding global marketplace for knowledge, goods, services, credit and other currencies.

11. CLIME is a global institution that is generated by five distributed, interlocking software engines that a) generate the system’s own currency (largent); b) provide clearing-house services for all transactions in largents; c) create the templates for all CLIME community groups; d) logs peer-to-peer accreditation of members and groups and e) maintains the global CLIME marketplace for knowledge, goods, services and credit. All five software engines work seamlessly together.

12. CLIME is a decentralized institution on the model of ant colonies, which have no leaders or leadership. Non-profit boards oversee the development and maintenance of the software engines. These boards insure the software engines can self-regulate the CLIME system and continuously eliminate bias, privilege, graft, embezzlement, cheating, etc.

13. CLIME membership is voluntary, and is a revocable, constantly earned privilege, not a right. Individuals and groups who violate CLIME rules will be dismissed from the system.

14. All members and groups are continuously rated for integrity. The reputational ratings are earned via peer-to-peer accreditation and factual evidence of work performed.

15. The system’s rules are limited to the fewest possible necessary to maintain system integrity and cleanse the system of embezzlement, fraud, theft, coercion, bias and privilege.

16. The systems’ rules are strictly enforced by automated anti-fraud software. The system is unforgiving because any laxness in the enforcement of rules will enable the rise of cheating, free-riding or privilege, which will destroy the integrity of the system.

17. CLIME eliminates moral hazard, i.e. the separation of risk from gain, and privilege, i.e. positions in which gain is risk-free. Put another way: CLIME requires every participant to have skin in the game.

18. CLIME directly links the creation of money to the expansion of goods and services that are meaningful to local communities.

19. CLIME is sustainable: it is self-funding and incentivizes best practices that do more with less and reduce waste, inefficiency and depletion of finite resources.

20. CLIME is globally decentralized and distributed so no central bank, nation-state or privately owned entity can co-opt or control it.

21. CLIME issues and distributes its own secure digital currency (largent) to everyone who has performed labor according to the rules. The largent is in effect a labor-backed currency, as it is created and issued in payment for productive labor that has generated useful goods and services.

22. CLIME measures well-being, security and opportunity rather than growth and consumption.

23. CLIME’s accounting of cost (price) factors in lifecycle costs, potential consequences and risks, not just the price set by current supply and demand.

24. CLIME enables global sharing of best practices (appropriate technology) and intangible (shared) capital, and fosters competition between the community organizations that manage work and payments.

25. CLIME community groups operate democratically, i.e. participants prioritize and manage the community’s work according to best practices.

26. CLIME guarantees the right of participants to choose their community group and switch membership at will. In other words, the system is opt-in; people can join or quit groups at will, or start their own group once they meet the qualifying standards.

27. Each community group generates a transparent, auditable, verifiable record of every decision, work project and individual labor record for all members.

28. CLIME institutionalizes incentives for membership, and establishes rules for revoking the membership of any participant or group who lies, cheats, steals, commits fraud or misrepresents his/her work or the work of others.

29. CLIME is self-regulating. A significant percentage of system-level resources are devoted to monitoring the system for attempts to establish bias or privilege, or cheat the system or its groups and members.

30. CLIME uses a semi-randomized (i.e. impossible to game) system for auditing and verifying compliance with the rules. In other words, CLIME has a robust audit system that monitors and enforces the principle that everyone must comply with the rules and have skin in the game. This is the only way to protect the integrity of the system.

31. CLIME has a purposefully slow and deliberate appeals process, in which anonymous volunteers from a variety of groups are randomly selected to review and judge appeals. The applicant cannot know who will be selected to review their case, nor their identity. This is not a judicial process, it is an administrative process, and the ruling is final, with the caveat that CLIME offers “second and third chances” to rejoin to those who ignored or violated the rules to benefit themselves or their cronies.

32. CLIME incentivizes productivity rather than consumption, cash rather than debt servitude and service to the community’s well-being rather than complicity with an exploitive status quo.

33. CLIME exists side by side with the existing market economy. Participants can choose to earn income in both the market economy and in community groups.

34. The global CLIME marketplace enables each participant to buy goods and services with their wages, sell any surplus they have generated, and assemble the engines of wealth, i.e. tangible capital (tools and materials) and intangible capital (knowledge, skills, social capital).

35. The CLIME marketplace can be understood as an evolving system that follows the Constructal Law, i.e. it evolves to provide easier access to the flows of work, wages, money, goods and services between CLIME groups and members.

36. Though CLIME relies on its transparent marketplace to price the real-time value of goods and services in largents, CLIME is explicitly designed to be a transmission system for decentralized, localized, highly efficient solutions and technologies for a Degrowth world in which there will be less of everything that has fueled global expansion: energy, commodities and credit.

37. CLIME is designed to optimize faster, better, cheaper within each group and region, in which cheaper is defined not only by price but as consuming less energy while accomplishing more productive work.

38. The CLIME system enables the collaboration and cooperation of groups in larger assemblies that are necessary to accomplish larger scale projects. These alliances may be temporary or semi-permanent.

39. The CLIME system does not aim for absolute equality in incomes or outcomes. Some groups will become wealthy, others will not. Some individuals will get by, others will prosper. The goal of CLIME is to provide every member an equal opportunity to build capital in all its forms, and to have access to knowledge and information that serves this goal at near-zero cost.

40. Variations of scale are implicit in CLIME. Some groups may choose to remain small; others may scale via alliances to operate hospitals, colleges, factories, etc. Alliances might include a handful or hundreds of groups, depending on local scarcities and needs.

41. All work performed in CLIME has dignity and value, by the very design of the system: all work chosen and managed by groups is useful, and all work is paid.

42. CLIME is designed to outcompete other anti-poverty schemes and other crypto-currencies by a) being largely automated; b) by encouraging rapid evolution of every component and group; c) by being highly scalable; d) by tying work directly to the issuance of currency and to the community economy, and e) by devoting significant system resources to defending the system from corruption, privilege, favoritism, bias, fraud, free-riding, theft, etc.

43. CLIME is designed with sufficient redundancy to emerge fully functional from a full system reboot if any key system is corrupted by disrupted.

44. CLIME is beyond the grasp of conventional economics (i.e. the state controls money and credit, the labor theory of value, etc.). CLIME redefines the nature of work, value and money at the ontological level. CLIME is founded on a moral foundation of creating and distributing money for meaningful labor.

45. The CLIME system is a new mode of production. It is not governed solely by profit as the arbiter of value (though it relies on the profit motive to generate productive trade), it is not beholden to concentrations of capital or power, nor is it dependent on a central state for funding or management.


LARGENT CURRENCY

1. CLIME self-funds its operations by issuing its own currency, the largent. The largent is in effect a labor-backed currency, as it is created and issued in payment for productive labor that has already generated useful goods and services.

2. The largent can only be generated in payment for labor that has already been performed. An additional sum (a percentage of all largents created and distributed) is continuously created to fund the operation and maintenance of the five global software engines that power the CLIME system.

3. The largent system generates an auditable trail of every transaction.

4. The largent is a crypto-currency that is designed to act as a global means of exchange rather than as an enduring store of value. It is a “flow scrip” (Moros and Olivera) that is earned rather than mined, and that has an internal demurrage function, i.e. its value eventually goes to zero with the decay of time, much like airlines awards miles.

5. (Should a sovereign nation adopt the largent as its currency, a permanent “largent2” would be issued that could act as the reserve currency for the nation that adopted the largent. The rules defining the issuance and distribution of “largent2” are necessarily different from the standard largent, as it serves a different purpose in the CLIME system.)

6. The currency is designed to maximize the velocity of largents while maintaining a stable value for the largent over time. This stability results from balancing the creation of largents to pay wages with the production of valuable goods and services by the CLIME community groups.

7. The largent can only be generated in payment for labor that has already been performed. An additional sum (a percentage of all largents created and distributed) is continuously created to fund the operation and maintenance of the five global software engines that power the CLIME system.

8. Wages within each region are set by the local cost of a) a square meter of living space; b) a kilo of local grain or equivalent (sweet potatoes, etc.), and a liter of fuel or equivalent. The goal is to set a wage that globally enables a full-time CLIME member to earn enough to house and feed themselves and two other household members, with a surplus for clothing, savings, etc.

9. This formula means those in high-cost countries will earn more largents, but the purchasing power of their wages will be equivalent to the wages paid in low-cost countries. The cost of travel to arbitrage the slight variations in regional pay discourages movement.


TRANSACTION CLEARING-HOUSE

1. The clearing-house maintains group and member wallets and records of transactions.

2. As part of the system-wide anti-fraud effort, the clearing-house software monitors the size and frequency of all transactions and transfers of largents. Unusually large transactions are flagged and frozen pending investigation, and unusually frequent transactions between groups or members are also frozen pending investigation.


GLOBAL MARKETPLACE

1. CLIME maintains a transparent global market for goods and services that enables free trade to the benefit of each party. Commerce between groups and individuals may be profitable, but the core purpose of the marketplace is to a) enable the exchange of local surpluses to fill scarcities elsewhere; b) enable the distribution of appropriate technologies and solutions to groups on a global scale, and c) build trust and shared purpose between all CLIME groups.

2. Goods and services within the CLIME marketplace can be understood as belonging in one of three categories: tradeable globally (i.e. non-perishable goods, digital services); tradable locally (i.e. semi-perishable goods and services that can be delivered in a local range) and untradeable (i.e. restoring land to productivity, etc.)

3. All CLIME groups and members (participants) must accept largents as payment in full for all goods, services, credit, etc. traded in the CLIME marketplace.

4. Outside vendors are allowed to freely trade in the CLIME marketplace, provided they accept largents as payment in full for all goods, services, credit, etc. traded in the CLIME marketplace.

5. Outside for-profit enterprises are allowed to offer services to CLIME members provided they accept payment in full in largents, and that a free, open-source alternative service is available to CLIME members. In other words, competition is welcome within CLIME, but there must be a non-profit, open-source free (or minimal cost) alternative to every for-profit service.

6. The CLIME marketplace enables CLIME groups and members to assess the cost of what is scarce in their communities and the market value of goods and services they produce. This information informs their decision-making.


COMMUNITY ORGANIZATIONS

1. The production of goods and services within CLIME are democratically selected within each community group.

2. The Prime Directive for all community groups is that work projects should prioritize addressing local scarcities in a long-term, sustainable manner, with a secondary focus on generating tradeable goods and services to the benefit of all group members and the global CLIME community.

3. Groups must first devote resources to meet their most pressing scarcities (many of which may be structurally unprofitable) before investing resources in profit-seeking ventures. The balance between these is dynamic and will be influenced by group decisions and market prices within the CLIME marketplace.

4. The group management software establishes a matrix of needs and leverage, i.e. an automated means of prioritizing proposed work projects so those with the lowest inputs in money and labor that fill the most pressing scarcities and produce the highest yield (i.e. offer the most leverage for capital invested) are tackled first.

5. Each CLIME group follows a basic template of good governance: each group must elect three officers who are responsible for documenting group decisions, work records and accounting. Each officer can only serve a single one-year term, though they can be re-elected after a year out of office.

6. Each group provides a positive social role for members, opportunities for camaraderie and shared purpose, and a wage for work performed on behalf of the group.

7. Each group is tasked with providing some resources to care for community members who are unable to work due to age or severe disability. (CLIME prioritizes providing work for the disabled, and so “severe” means the person is unable to do any kind of work whatsoever.)

8. Any CLIME member can start a new group, provided they recruit the minimum number of members, which is set at six: three officers, and three other members who can take over when the one-year term of the initial officers expires.

9. Maximum group size is set at 150, to enable beginners with rudimentary management experience to operate groups. Those groups that seek to expand beyond 150 members are free to form alliances with other groups to manage larger scale projects.

10. Participants can be members of more than one group, provided they meet the work requirements of each group (typically, 20 hours per week minimum).

11. CLIME is designed to maximize transparent competition between groups for the most effective members, leaders and skills. It is anticipated that many groups will fail, a process that quickly educates members on what is necessary to operate a successful group. CLIME is founded on the principles of open competition and cooperation, and of fast adaption via “fail often, fail fast.”

12. Members are encouraged to start and operate their own household businesses within the CLIME marketplace. This expansion of goods and services provides a larger market for those with wages to buy what they need/want.


REPUTATION / VERIFICATION

1. Each member’s work claim is verified by objective evidence (a low-resolution photo of before and after, drone imagery, etc.) and the authentication of other members.

2. The reputation of each member and group is ranked by the accuracy of their reports of their own work and the work of others, on the integrity of their transactions within the marketplace (did they provide the payment or product as advertised), their service within their group, and on their service as reviewers/auditors within the CLIME system.

3. Fudged or inaccurate reports reduce a member’s rating, as does poor work, poor service to the group (low attendance, skipping work-group meetings, etc.) and unsatisfactory transactions. Accurate reports, excellent work, participation and transactions boost ratings.

4. Groups are also rated on their compliance with system rules, their work performance and their service to the community.

5. Individuals whose membership has been revoked for non-compliance or breaking the rules may re-apply for membership after a waiting period, but their reputational rating will be marked by their dismissal until their work record warrants an improved rating.




The Architecture of a Labor-Backed Cryptocurrency System, the Largent

by Charles Hugh Smith (June 21, 2016)

This paper proposes an architecture for a labor-backed currency system, the largent, based on my book, A Radically Beneficial World, the flow-money paper “Proof of Labor Improvement Proposal” by Julio Moros and Oscar Olivera, and Rob Hitchens’ paper, “Proposal for a Credit-Backed Crypto-Currency.”

The Architecture of a Labor-Backed Cryptocurrency System, the Largent






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