Grassroots Economic Metamorphosis
As we explore grassroots economics, the concepts of vouchers, pools, and indices surface as three core elements to consider. Together, they…
As we explore grassroots economics, the concepts of vouchers, pools, and indices surface as three core elements to consider. Together, they can create an economic commons — a shared resource managed by a community for the benefit of all its members.
The first part of this trinity, the voucher, represents a commitment to provide a service or value. Think of it as an IOU: “I owe you a service or good in the future.” These vouchers can be as specific as “I owe you an hour of plumbing work” or “I owe you a one dollar worth of my plumbing services”. They are grounded in trust and the promise of future value exchange.
The second component is the pool. Pools act as treasuries holding various community chosen and created vouchers. The pool provides an instrument that enables members of a community to swap or trade their vouchers. It’s a hub for managing and redistributing the commitments made by community members, allowing for a fluid and dynamic exchange of value.
Finally, we have the index. Price indices assign relative values to the vouchers in the pool. It answers the question, “how much of this voucher is that other voucher worth?” in a systematic and standardized way.
These three parts form key elements of an economic commons. But how do we get there? Here’s an outline of three stages that lead toward grassroots economics as a destination.
Phase 1: Voucher Creation
In this stage, individuals and associations express their value propositions in the familiar language of national currency. For example, a baker may issue a voucher that states, “I owe you one dollar worth of bread,” thereby attaching to that a value equivalent to the going rate for a loaf of bread in national currency. Note that vouchers denominated more specifically in coconuts, service time, and energy are will become the norm in stage 3.
Phase 2: Pool Creation and Initial Indexing
Community members then gather their vouchers into a pools. Pools enable vouchers to be exchangeable and begin to flow as media of exchange. The pool also limits risk of over exposure to any specific voucher.
The initial price index for these pools can begin with the relative value of each voucher to the national currency. Vouchers denominated in familiar national currency could all be given equal value in the pool. Hence a starting pool with each voucher being of equal value to each other and the national currency like (USD).
Phase 3: Localized and Aggregated Indexing
As the system matures and stabilizes, price indices begin to localize and aggregate. The community may start to set the relative value of vouchers based more on internal factors, such as well being, local supply and demand, rather than sticking closely to national currency market prices. A portion of each pool can relate to market prices and national currencies while other parts of the pool drift from these. As multiple communities grow and develop their own systems, these can aggregate to form bio-regional economies, with localized price indices facilitating trade between communities.
Can we imagine a community moving away from USD market pricing toward their own price index (central column).
This transition to grassroots economic systems represents a shift from a sole focus on national currency market prices towards a more locally-attuned, cooperative form of economic organization. It’s an approach that brings the control of economic activity back to the community, allowing for more democratic decision-making and potentially contributing to a more sustainable and equitable economic future.
Help envision and manifest this metamorphosis!
Check out the work of Grassroots Economics Foundation and get involved.
Short write up on pooling: https://www.grassrootseconomics.org/swap-pool
Here is a short explainer video on cooperative pooling. https://youtu.be/T5Hvr8HdjfI