The Votive Economy IV – Commerce

Commerce is the coordinated effort of government and business in the pursuance of enterprise. We have already covered government in III, so the focus of IV will be on business, with particular focus on the joint stock company.

Of all the examples of the voted money dialectic, the joint stock company, the primary engine of capitalism, is perhaps the most self contained mechanism for the generation of votes and money. Just as capitalism and democracy can be reduced to their unitary values of money and the vote, the joint stock company can be reduced to the unitary value of the share. The creation of the share can be seen as the birthing of a new unit of value in a democratic society, standing astride money and the vote and therefore unifying capital and democracy, public power and private power. Just as money is a form of encapsulated vote, the share is form of encapsulated money, and just as money inherits characteristics of the vote, the share inherits characteristics of both.

As the share is a product of money and the vote, the many axioms describing the relationship between them in III can also in many cases be applied here, to shares and their operation in the stock market. For this reason, Part IV will be more exploratory, with a summary of axioms at the end, although key points will still be bolded for emphasis.

The Origin of the Share
A Roman tax collector. Shares of the taxes collected went to the societas publicanorum carrying out the tax collection

The Roman parte is thought to be the earliest recorded ancestor of the share. Its origin arose though the administration of public contracts for work such as maintenance of buildings and tax collecting, issued by the Roman government, which were managed by societas publicanorum, a society of citizens who would collectively pool and invest their own labour and wealth in the enterprise, with the government either providing liquidity from the treasury or a future promise of payment if funds in the treasury were low. Partes were shares of this collective pool of wealth, and shareholders participes, and there is evidence that these partes changed in value and were traded. The tax collecting function of the societas publicanorum all but guaranteed payments to the participesPartes therefore worked as deferred payments issued by business and backed by the state and operated as a form of money. 

From their inception the concept of shares involved a marriage between state power, through the granting of charters or contracts by the sovereign or legislative body, and the entrepreneurial power of organised labour. 

The public/private template established in Rome has echoed through the governance of subsequent civilisations. The use of public taxes to fund the dividends of private shareholders in public enterprises was a founding principle of the Bank of England, the first central bank that could issue currency. The Bank was created as a joint stock company via an Act of Parliament in 1694, spurred by a major naval defeat in The Battle of Beachy Head. Investor money went directly to the government, who then paid dividends on the shares held by investors from future taxes. The government used over half the initial loan created by the bank in productive investment, building up the British Navy and its supporting industries. The money directed towards the Navy filtered through the economy, funding the development and innovation of industries and agriculture to support it and forming the foundation for the rise of the British Empire, which rested upon the Navy’s command of the sea. Likewise, the British East India Company started off as a commercial enterprise with a Royal Charter, and developed into the major arm of the British Empire with its own private army.

Image result for battle of beachy head

The Company as State and the New State of the Internet

Joint stock companies can be thought of as incorporeal, microcosmic states within the political and economic jurisdiction of larger, geographically bounded macrocosmic states, which can be national or supranational. The operation of companies feed back into and alter the nature of nations and supranational organisations, which in turn feed back into into the operation of companies.

Today extremely powerful private companies such as Google, Facebook, Twitter, Amazon and Apple, effectively operate as the governing structure of the Internet, which can be thought of in itself as a supranational state. Through their commercial relationships with governments, such as Amazon’s contract with the CIA for cloud services or Google’s work on a search engine for China, we can see that a new form of political economy is in operation. Although not bound by geography, this new state is nonetheless physically present, embodied in devices used to access it – if we imagine everyone placing their phones face up on the earth it becomes clear that a literal new state, in the geographical, physical and political senses of the word, has been created.


If the slow processes of public votes every four years and legislative votes on bills of law are the heart of democracy, the joint stock company, the issue and daily trade in shares and the issue and movement of money through the economy are its limbs and lifeblood. Public legislative and judicial bodies governing the wider state play catch up to regulate and enact new laws as new needs, processes and technologies are created by companies that change society.

However, in the digital age the pace of change has benefited the balance of power of microcosmic incorporeal states over geographically bounded macrocosmic ones (what Santi Siri of Democracy.Earth has termed land vs. cloud), with the ubiquity of the new digital state leading to the big tech companies mentioned above having more power, money and jurisdiction than national governments. The EU, with its globally impacting GDPR legislation and upcoming copyright legislation may well be an exception to this balance of power, however until there is no geographical location from which to spoof your location using a VPN it will be possible to at least bypass these laws, although the very nature of the internet will be affected nonetheless. That aside, examining the governance structure and dynamic of companies and the stock market is fundamental to understanding how the balance of power has shifted in modern political economy.

Governance through Shares and Voting Rights
The Rochdale Equitable Pioneers Society opened on 21 December 1844
The Rochdale Equitable Pioneers Society opened on 21 December 1844 and is regarded as a pioneer of the modern cooperative movement

In joint stock company governance ownership of a share can provide voting rights to the shareholder, although the structure and rules of voting within companies can radically differ based on the different classes, proportions and assignments of shares that the company issues. As opposed to companies issuing shares that directly equivocate voting power in proportion to the amount and classes of shares held by the shareholder, cooperatives have as a core value the principal that voting power cannot be bought and company decisions are made on the basis of one member, one vote. The vote is equally available and equally bounded for every individual, and not represented or transferable by an accrual of money, although voting rights are still purchased by money.

Shareholders use their voting rights to vote on remuneration for the Chief Executive Officer of the company, or vote to re-elect or remove a company Director from the board. Company Directors decide on the payments of dividends from companies to shareholders, which can be either in the form of money or more shares. Share repurchases, which use company profits to buy back company shares from shareholders, can also be used to reward shareholders by directly exchanging shares for cash. By reducing the number of shares held by the public, price and earnings per share are increased for remaining shareholders.

Following Milton Friedman’s influential heuristic that the sole purpose of business is to generate profit for its shareholders, the governance of joint stock companies result in a baseline dynamic in which CEOs and Directors are under pressure of the vote to make a profit and direct money from those profits to the shareholders via dividends. Profits can also be re-invested into the company itself, a proposal which shareholders can agree to via their votes, however, again following Friedman, this means the default voting proposal of shareholders is to do anything that grants them a dividend, and as long as that is happening shareholders tend to agree to AGM proposals by default. This is comparable to voters voting for political parties that will give them the most benefits from the treasury and is another example of money being used to vote for its own increase.

As shareholders collectively hold the power to sink a company by mass selling shares, dividends are often given at the expense of benefits to company employees and re-investment, as was seen with the collapse of Carillion in the U.K. To draw an equivalent between the governance of a company and the governance of the state, this is the equivalent of directing more benefits to voters than money is taken in in tax.

Carillion is a classic example of the hedging of economic power via the mutually remunerative votes between company directors and shareholders

Employees and shareholders are of course not mutually exclusive roles, with cooperatives in particular often being structured to be collectively owned by its employees and customers. Governments legislate for the provision of tax efficient employee share schemes to encourage this, however it is not commonly taken up (it is estimated that only around two million employees in the UK are engaged in Employee Share Ownership schemes, despite evidence of the improvement in productivity it provides).

Where the roles of employee and shareholder are mutually exclusive, to combat the hedging of economic voting power by shareholders, employees across companies can also form a network of voting power by joining a labour union. In order to vote in a labour union people must pay a membership fee, universally operated on the principle of one member one vote. Collective bargaining by a union is then used to increase the wages or benefits of the members, which grants a dividend of the networked power of the labour vote from the profits of the company into the pockets of the workers. In this way the union effectively transforms the labour power of each individual member into a potential future share of the company.

To enforce this workers can vote for a strike, removing their labour from the company (or providing free services to customers, as done by bus drivers in Japan), which will reduce its ability to capture value and therefore be a factor in reducing the value of its shares. Strikes also have the effect of removing money from the striking workers who invariably have their pay docked, although this is generally covered by strike pay from the labour union. Even so, votes by labour to strike are a form of negative vote that in the long term removes money from both the worker and the company. The worker is willing to take an economic hit in order to punish their unjust remuneration by the company, or the lack of investment being made in the company by the directors and shareholders.

Investment as a Positive Vote

The relationship between all companies and their success or failure in their contribution to the wider state is established through the buying and selling of products, services and shares representing the value of each company. The overall market cap, the sum total value of all joint stock company shares, is a reflection of the ongoing tension between vision and realisation, of how well companies can live up to their word and public image, how trustworthy, truthful and competent they are in the service of the vision they describe, and how valuable their contribution to society is. Theoretically a healthy stock market is a reflection of a healthy economy in which companies who provide a valuable vision live up to that vision and deliver their goods and services as promised.

The main means of persuading people to invest in the shares of a company is to reward them with a return on their investment in the form of a dividend per share. The initial investments in shares of a start up company that does not yet have a revenue stream mean that effectively investment is a positive vote for that company’s vision and the company employees’ ability to deliver on it. Investment is therefore to some extent a self-fulfilling prophecy as it further enables the company to succeed in the short term via financial backing, signalling confidence in the endeavour being undertaken and the team behind it. The long term, and true value of the company, depends on how well the company is run and whether it can get through the first investment rounds and deliver on its vision through actual work and delivery of goods and services – otherwise known as the Lindy heuristicIf the fulfilment of the vision the company promised to investors is not delivered, or delivered poorly, or if what the company provides is not as valuable to the wider state as the company and investors imagined, the promised vision collides with the unfulfilling realisation and the share price collapses.

Short Selling as a Negative Vote

If investing in a share is a positive vote for a company, selling or short selling a share is a negative vote, reflecting a sense that the value of the company is over inflated when compared to other similar investment opportunities, or simply not as valuable as the share price indicates. Too many people selling will flood the market and decrease the value of the share and therefore the company’s value. A large short position against a company can be seen as an investment warning and may drive away other investors. In this way the stock market is a democratic forum in which money operates as a vote that accrues to a valuation and can be used to either support or undermine activity within it

The speculative value of a share is in negotiation with the reality of the value of the company divided by the total amount of shares in circulation. Through investing and short selling, investors make money through their successful value judgements, investing in companies that they think are producing something of value and not investing, or even shorting, companies that they feel do not produce value, or are losing value – that is at least, in theory.

“What’s important when you’re in that Hedge Fund mode is to not do anything remotely truthful” Jim Cramer

In reality what investors count as valuable is the means by which they can extract value from the mechanisms of the market, which ultimately boils down to wherever profits are being made or lost, however that is done, and will buy war and sell peace and call war peace and peace war if they think it will move the market to support their positions.

The wholesale abandonment of truth in order to receive investment or inflate or deflate the value of shares can be the result of poor judgement and self-deception as well as greed and outright fraud. In order to persuade people to invest and keep their money in any value yielding enterprise, the success of which is dependent upon that money, it is highly tempting to liberally galvanise the prospect of potential value that will be created. It’s not surprising therefore that as well as being an engine of economic growth, the joint stock company is the source of economic bubbles such as the South Sea Bubble and the Mississippi Scheme

Shareholder Value vs. Stakeholder Value

Investors are not necessarily stakeholders. They do not need to have an interest in or directly be affected by the outcome of the endeavour whose shares they are trading in, only that it makes money in the mechanics of the market, which makes the abandonment of truth for the truth of profit a highly pragmatic approach. For shareholders, money becomes a generalised proxy of all possible values, and the entire stock market system is undermined by a sociopathic interpretation of enlightened self-interest in which loopholes in the procedural and/or mechanical implementation of regulations are routinely abused by investors in order to extract money out of the market. The means through which this is done are legion; pump and dump trading, the spreading of FUD and shorting, front running through high frequency trading, complex financial derivatives, libor rate manipulation, ponzi schemes, and creating artificial short side supply dynamics. On top of this company accounting is largely an exercise in financial alchemy and aggressively exploiting legal loopholes for tax avoidance. Being legal, tax avoidance is only foolish if you don’t do it. It only takes a cursory review of the frequency and scale of stock market, accounting and financial scandals to come away with the unshakeable impression that corruption is the norm.

It is tempting to say that it is largely corruption that leads to the extreme concentration and inequality of wealth that we see today, but even if well regulated and low in corruption, money being used as votes means that even what many people would consider reasonable concentrations of wealth warps demand being expressed through the market and therefore can lead to a failure to meet the needs or express the values of the general population who have less money to direct it. Amartya Sen, in his famous work  Poverty and Famines: An Essay on Entitlement and Deprivation, made the valuable insight that famines are caused by a failure of distribution rather than lack of food, which he put down to a lack of democracy. The largest impact of distribution in terms of controlling the market is the distribution of money. In terms of the market, those who have more money have more votes. Institutional investors and Hedge Funds are in effect the representative democracy of the wealthy, with a single policy – make us wealthier.

Extreme inequality of wealth is often justified by asserting that the people with the most money are the people who support and produce the most value, therefore the people who support and produce the most value have most of the say in terms of how the world is shaped and run, creating a kind of meritocratic hierarchy. Again, with regard to the Lindy heuristic this is true to an extent but despite the great work investors and entrepreneurs can do, the barriers to entry into the market due to the hand to mouth existence of the lower paid means that there is an enormous waste of potential good because of inequality of the means of assigning value to the market. There is a circular relationship between the use of exploitative practices in commerce to lower prices and wages, and recipients of low wages only being able to assign value to the products of those exploitative practices.

In contrast, votes are also used to assign value to the market and form an important part of market operations and directing monetary flows, and these are generally made available for everyone to use for free. Product reviews on online shopping sites use range voting (ratings of one to five stars) that determine the overall rating of a product in its category. Higher rated products are more likely to sell than lower rated products of the same type. The rating translates into higher revenue for that product. Online range votes are also applied to merchants, tradesmen or those providing a service, and in some cases customers themselves are given a ratingSupermarkets give tokens to their customers at the checkout to be deposited in a choice of boxes representing charities. The tokens represent votes. At the end of each voting period the tokens are counted and the charity in receipt of the most votes receives a monetary donation from the supermarket. The vote market is an already existing and incredibly powerful force in the shaping of the economy.

The nature of commerce, the marriage between the public state and private enterprise, with its battle-lines between shareholders and stakeholders, is again going through great disruption in the digital era. One of the most notable disruptions is the phenomenon of crowdfunding, a form of market purism in which the return on investment is exclusively the realisation of a proferred vision. In this model, the work itself matters to the backers, who are all stakeholders rather than shareholders, and it is the production of the work that is the real return on investment – people vote with their wallets on what they want to see in the world, not on making money. Dividends are replaced by backer rewards, in which different levels of monetary support garner different levels of reward. This transition from shareholder to stakeholder undermines the entire incentive structure of the stock market and fundamentally alters the nature of commerce.

Commerce Axioms in Summary

The governance of joint stock companies and their value as determined by the stock market as outlined above demonstrate many of the examples of the voted money axioms established in III. The use of money in the stock market for both positive and negative votes shows that votes influence the flow of money through the market. Votes within joint stock company governance cannot create money, due to the restriction by law, which is the interface upon which money and the vote interoperate, but companies provide (or destroy) value through their work which is measured in the value of stocks and shares. These can be issued or bought back and retired to inflate or deflate their value and is dependent on (and reactive to) a flexible supply of money to do so. Votes within joint stock companies can remove money from circulation via share price inflation and holding on to large amounts of cash – Apple sits on an enormous cash reserve of around $280 billion dollars. The granting of voting rights to shareholders to influence the Directorship of a company in their capacity to distribute profits again demonstrates that money contains and is dependent upon the power and function of the vote, that votes transform into power over collective money and that votes conduct money from a collective pool to subsidise individuals or enterprises.

Joint stock companies also break the negative axiom that votes must not be bought by money in cases where the number of shares held translates into the number of votes. And of central importance is the corrupting governance of shareholder voting, in which shareholders and company executive voting decisions are bought by money, with votes on executive remuneration and votes on shareholder dividends forming a self interested alliance, with the outcome regularly being wealth extraction by the voters against the interest and at the expense of the endeavours of the company, its workers, and often the ecological, social and cultural environment that the company creates through its profit making.

The next part of the essay will focus on the relationship between votes and money in the area of Cryptocurrencies.


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The Votive Economy III – Banking, Government and Law

If you’ve not read them already, please read The Votive Economy Part I and Part II as this post builds on the ideas developed in those posts from the outset.

Part III will look at the areas of Banking, Government and Law, framed in terms of how votes and money interact in each area. The main purpose is to establish axioms describing the relationship between votes and money. Once a set of axioms is established we’ll use them as the basis for a new political economy which I’ve termed the Votive Economy.


The Royal Exchange and the Bank of England, Lithograph by T.Picken, 1851


A Central Bank committee takes a vote on a new round of quantitative easing. The vote succeeds. These votes create money, which is used to buy securities on the open market such as government or corporate bonds, introducing money into the economy. As the money is created by fiat, a decree, this money is created out of thin air, from the collective word of the bankers. This hints at the occult nature and history of money creation and banking.

The money created contains within it and is dependent upon the power and function of the vote. The vote is an encapsulation of the decisive word or decree. The word vote comes from the Latin votare, meaning a wish or a vow, and is an expression of the creative power of the word or the logos. Fiat lux – let there be light. Fiat pecunia – let there be money.

Money incorporates the vote, the vote incorporates the word.

To test this axiom we can ask if it’s possible to vote for something without spending money. The answer is of course, yes. Can we spend money on something without, in effect, voting with our wallets? In other words, can we spend money whilst removing from it all the inherited characteristics it has from the vote? No. If it were the case, consumer boycotts and international trade sanctions would have no power whatsoever as you could happily continue to spend money on something whilst stating that you’re not giving it any support. When you spend money on anything, you are voting for it. Equally importantly, you are also voting for the money in itself. Every transaction using money is a vote for the overall network power of that money.

Commercial banks create 97% of the money in circulation, out of thin air, lending to individuals based on their credit rating. The creation of money is done via double entry bookkeeping in which the bank creates a liability on their own books that is simultaneously an asset that generates interest – the plus of the credit exactly cancels out the negative of the debit. The credit score of an individual is based on a collection of facts gathered by credit agencies that appraise the individual’s ability to accrue money and service their debts. The loan is created when the bank purchases a security or promise to pay issued by the customer when they sign the loan agreement, as the economist Richard Werner deftly explains here. The loan is nothing more than the bank’s record of what they owe you when they purchased the security.

This rating or valuation of a bank customer seeking a loan is a reversal of the normal dynamic of customers rating products, as seen for example in star ratings on e-commerce platforms. The customer of a bank is also a product, rated by a credit scoring agency, whose ability to generate value through their labour is then purchased by banks via money that they create from nothing. The person desiring a loan has to sell themselves to the bank.

This dynamic of large scale money lending by commercial banks does not lend itself easily to the voted money dialectic, as there is no direct human decision in the rating system, which is essentially a vote of confidence in an individual’s market value. The credit agency pre-calibrates the vote for the individual borrower based on an algorithmic measure of their success in exchanging their labour and products for money in the labour market and their ability and willingness to service the interest on the loan. This vote does not care about the beneficence or goodness of the debtor or the real value or social or ecological desirability of the enterprise that the money issued will be spent on, only that the debtor can keep paying, regardless of the cost.

At best we might say that the vote incorporated within money is voting for more money. In this way it can be understood as money voting for its own increase. As they are entirely removed from real living human values, these credit rating votes are the closest thing we have to a psychopathic artificial intelligence directing society. Or perhaps it is money as grey goo, replicating itself across the earth and eating up people and the natural world, leaving devastation in its wake.

A Central Bank committee takes a vote on whether to raise interest rates or sell securities in open market operations. The vote succeeds. The raising of interest rates makes credit more expensive and contracts the money supply as people borrow less and use money to pay off debt. As the selling of securities proceeds, the Central Bank holds the money taken in exchange. These votes remove money from circulation. The vote can also be used with a negative effect against money in mind, to destroy it or remove it. Even though the money is ‘held’ by the Central Bank, the main purpose is not to store money but to effectively remove it from existence. As the bank can create money from nothing but a decree, holding any amount of something it can simply create from nothing makes no sense. The money is returning to nothing from whence it came.

Within the voting framework of the International Financial Institutions (IFIs) of the World Bank and the International Monetary Fund (IMF), each nation state has a share of voting power. This is split between what are called ‘basic votes’, which are apportioned equally to all nation state members, and ‘share votes’. Share votes, or Special Drawing Rights (SDRs) in the case of the IMF, can be purchased in exchanged for money. The IFIs and their subsidiaries apportion votes to their members based on varying formulas that all share the same ultimate result, that the voting power of basic votes are completely outnumbered and overpowered by the amount of shareholder votes. The balance of voting power is overwhelmingly based on money.

This is the first fundamental corrupting error in the relationship between money and the vote in the current political economy. Votes must not be bought by money. If votes and therefore voting power can be purchased by money, then in effect they become indistinguishable from money, and democracy becomes indistinguishable from plutocracy. The essence of a plutocracy is a system in which money has ultimate power over the vote and is essentially money voting for its own increase.

Developing and transition countries have almost 80 per cent of the World’s population, provide 75 per cent of IMF income, are subject to 100 per cent of IMF programmes yet only have 36 per cent of the votes on the IMF board. – World Development Movement: Denying democracy – How the IMF and World Bank take power from people

IMF and World Bank loans come with conditions in the form of policies which debtor nations are obliged to vote for and implement in order to receive the loan. These conditions are effectively purchasing voting decisions on economic policy with money. If the alternative to not voting is for IFIs to asphyxiate your country’s economy, there is not much of a choice, unless you have the balls to implement a secret plan to create your own money.

Again, the aim of not just the policies implemented but the way they are voted for is to maintain the power of money over the vote. This is the second fundamental corrupting error in the relationship between money and the vote: voting decisions must not be bought by money. Private citizens or their representatives exchanging their votes or voting decisions in public elections or legislative votes for money is considered fraud, but that is exactly what is happening with the IMF, the World Bank, and the legislative assemblies that vote to take IFI loans in exchange for implementing IFI policies.


Within the current political and economic framework there a number of paradoxes in the relationship between voting and money in terms of whether taking money in exchange for votes is considered illegal, fraudulent or corrupt. Much distinction can be made by stating that votes cannot be exchanged directly for money but instead can be pooled together wholesale and money can only be exchanged once the democratic process has finished, winners are announced and any re-distributive policies are enacted.

Casting your vote in an election, no matter who gets in, gives power to a government over the use of a country’s treasury through taxation and spending. These votes transform into power over collective money and conduct money from a collective pool to subsidise individuals or enterprises. The key distinction here is that votes conduct money to direct towards an end other than a direct monetary exchange as reward for the voter. The vote to direct money is a vote for the realisation of the vision or the enterprise being voted for, not an economically selfish vote for immediate monetary reward, such as a corrupt election in which votes for a political candidate are illegally purchased from voters by that political candidate in exchange for money.

Despite the distinction above and the attempt to remove corruption of votes by money via the filter of the democratic process, there still remains ample possibility for entirely legal voting for direct monetary reward within democratic institutions. Before the expenses scandal and creation of IPSAMembers of Parliament could vote to award themselves a pay rise. Kent County Councillors  recently awarded themselves a 15% pay rise, against an independent recommendation of 1.5%.

As well as positive votes assigning money to individuals or enterprises, negative votes also occur within government. A parliament can take a vote to impose economic sanctions on another country, preventing trade and certain financial transactions. They can vote to reduce the amount of subsidies given to certain industrial sectors, freeze the pay of public sector staff, cut the amount of benefits given to disabled benefit claimants, or reduce the amount of short money given to allow opposition political parties to operate. These votes remove money from circulation.


This series of blog posts is an attempt to discover what could be called the de facto ‘natural law’ in the relationship between money and votes, the axioms that define the bounds of their interoperation outside of which they could no longer be rightly classed as money or votes, or which, if they are not observed, throws their relationship out of balance and leads to poverty, dissolution and plutocracy.

Law (which includes computer code as Lawrence Lessig observed) is the interface upon which money and the vote interoperate. The rules of the interface can in turn be altered by the usage of votes and money within it, such as through grassroots democratic campaigns, corporate funded political lobbying that influences democratic representatives, or smart contracts coded into decentralised applications stored on the blockchain.

In liberal democracies laws are passed by a series of votes that among other things determine the rules around how voting operates and how money is governed. Central Banks operate independently of the legislature but just as this arrangement was relatively recently brought in by an act of law, it could also be changed by an act of law, and so primary legislation voted on directly as bills of law and the votes that pass them are still supreme.

The application of law in trials by jury is determined by juries voting on a verdict. Punishment for crimes often includes a monetary fine, so that the votes of the jury conduct money from one place to another, without the jurors having any direct involvement.

Votes can actually be cast whenever you want. You can cast one now – for example you could stand up and say ‘I vote for fracking to be banned worldwide’. The only problem is that there’s no system or network of laws in place to count it. Even if everyone in the world who wished it stood up and said that they were voting to ban fracking, and this turned out to be a majority, it would make no difference. You might as well shout into a well.

However, if enough people hold the belief, communicate and act in a network, the de facto natural or axiomatic law is of a higher order, as the recent referendum in Catalonia showed – it was carried out despite it being illegal, and returned a result. The police, enforcing the law de jure, tried to stop it, but they could not. De facto natural law, the power of creativity, adaptability and cooperation built upon interpersonal trust and directed at a shared objective, is more liquid and more powerful than de jure enforced law, which can be thought of as law that retains the power of an oligarchy through force.

Spanish police remove ballot boxes full of votes from the 2017 Catalan referendum

However, if enforced de jure law does not change in response to de facto natural law, the change involved is only effective up to a point. The action of de facto natural law, of natural agreement, rule setting, creativity, and cooperation between people, must be allowed to either remain in and create its own culture or lead to a state change in de jure enforced law. If either of these fail to occur,  de jure enforced law, usually imposed non-locally and from a higher and less populous legal office, will simply reassert itself through violence or incarceration, or if this is not possible due to the sheer numbers of people in agreement through de facto natural law, can do so by just waiting out a stalemate in which it has the veto position.

As well as voting whenever you want, you can also issue money whenever you want. Try it. Write on a piece of paper ‘IOU 10 ultradollars’. If you give it to someone and they accept it in an exchange, you have just issued money. This is exactly what you are doing when you take a bank loan, and the bank gives you legal tender in return. The only difference is that by de jure enforced law you must accept legal tender in lieu of payment, whereas you are free to reject an offering of ultradollars (you fool). If your friend accepts the ultradollars, then uses that promissory note to pay someone else, who also accepts it, and that person in turn pays you, and then you in turn pay your first friend back, you have created a mini version of our fiat money system, in which a single promissory note was issued, circulated and drove activity. The de facto natural law that allowed the issuance and acceptance of the money was trust, or faith, in another person, that their word was good, and the overall trust in the network created by that interpersonal trust and by the rules of exchange. As stated above, every transaction using money is a vote for the overall network power of that money as well as whatever the money is being spent on. It is the network of votes behind money that gives money its power.

One of the most famous and successful issuances of community money was the Wörgl Experiment in Austria, in which the Mayor of Wörgl, the marvellous Michael Unterguggenberger, arranged for the provision of community money based on Silvio Gesell’s ideas of demurrage. The decision of the issue of the money was put to the Wörgl Welfare Committee in a decisive session after the Mayor had already consulted with each member of the committee individually. Presumably, although I cannot find evidence of this, the issue was decided on by a vote, which was the agreement on the rules of demurrage that would govern the Wörgl currency. The experiment was shut down after a court case brought about by the Austrian Central Bank, who wanted to reassert its sovereign ability to create money. The eyewitness accounts and interviews with the people of Wörgl at the time make for fascinating reading.

Another experiment in money created by de facto natural law and shut down by de jure enforced law was Social Credit, created by Major Clifford H. Douglas, not an economist, but an engineer. In Canada a party espousing his theories, the Alberta Social Credit League, actually got into power after a shock landslide vote, but the bills intending to implement some of the Social Credit policies were blocked by federal and commonwealth judiciaries and refused Royal Assent by the Lieutenant Governor John C. Bowen. At one point the Lieutenant Governor threatened to use his reserve powers to sack the entire Social Credit Party from government. This would have triggered another election in which the Social Credit Party would have been voted back in, and was thus a stalemate between the power of de jure enforced law invested in the high office of an individual and the de facto natural law vested in the power of the vote in the hands of the wider population.

The history of early American currencies during the colonial period and the various British Currency Acts that were imposed to control them is another good example of monetary systems created by local de facto natural law being destroyed by a distant sovereign power via de jure enforced law. The history of the use of wampum is another good example, and the other uses of wampum, not least in its use as a legal language to record the Great Law of Peace.

To sum up, law operates primarily through limiting whose voices can be heard by limiting whose votes can be counted and whose issue of money can be recognised. This law is borne by every individual within a particular culture, and can be changed by the power of the word.

The next part of the essay will focus on the relationship between votes and money in the area of Commerce.


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The Votive Economy II – How Money and the Vote Relate

With their contrary visions of humanity’s relationship with power capitalism and democracy can be set up as dialectically opposing forces – thesis and antithesis. In Part I , we refined the ideologies of capitalism and democracy down to their units of value; money and the vote. Even though they are in opposition, these values are in a constant, systematic synthesis based on a set of rules or laws. The outcome or proxy of this synthesis is human political and economic life.

“Without contraries there is no progression” – William Blake

Due to the advent of networked digitisation we are currently undergoing a step change in the nature of their relationship. The digitised networks of the information age have performed an alchemical trick on the unitary values of capitalism and democracy that we have still not fully grasped the consequences of. Classical liberal democracy was forged in a time in which money and the vote were two vastly different mediums. Money was gold and silver specie, promissory notes, scrip. A vote was the ‘aye’ of a propertied man standing in a parliament or some other ornate chamber designated to count his voice. Now money and the vote are represented in the same digital medium and can therefore directly interoperate and be directly interchanged. To illustrate how radical this state of affairs is, imagine that the ‘aye’ of the propertied man standing in the ornate chamber was a magical spell, and caused a shower of gold coins to appear in mid air and clatter across the floor. Imagine if another man could then stand and state ‘nay’, and cause the gold coins to disappear. This is now the reality we live in and the context in which money and the vote must be considered.

Definition from The Concise Oxford Dictionary, Ninth Edition (1996)

Networked digitisation is not creating something new in terms of the dynamics of votes and money, but abstracting, compressing, proliferating and accelerating an existing process, that being our ability to use the power of the decisive word embodied in a vote – yes and no, for or against – to shape reality, by interacting with money which then drives the economy through real activity. The heating up of this process is so extreme that it represents a state change in the political economy, like solid to liquid, which in its impact seems like another state of existence.

As this new context is already real and not a hypothetical, it must follow that money and the vote’s new relationship is already in effect, and therefore we should be able to find real examples in the world from which we can draw axioms. Rather than working abstractly with the values of money and the vote to reach a synthesis through deductive reasoning, this inductive approach allows us to work backwards from the interoperation of money and the vote in the real world. The next few posts will examine the areas of Banking, Government, Law, Commerce, and Cryptocurrency, providing examples of the relationship between money and the votes in each and drawing a set of axioms, which will be identified in bold within each example. This will build towards a list we can then use in Part 3 to start devising a new political and economic paradigm that takes full account of the new state of reality that we find ourselves in.


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The Votive Economy I – Voted Money as the Next Evolution of Political Economy

Francis Fukuyama, in The End of History and the Last Man, considered liberal democracy to be the ultimate maturation of human political economy. Fukuyama stated that this victory marked “the endpoint of mankind’s ideological evolution”, an assertion that many have problems with but due to the ongoing resilience of capitalism and democracy no one has yet been able to fully dismiss. Although the realisation of capitalism and democracy in the world can be argued by any sensible person to be corrupt, broken, illusory, unattainable, dysfunctional, decrepit or in decline, together these two ideologies still represent the main political and economic forces driving the industry of our species, to various degrees, balances and levels of effectiveness across the globe. When crises happen, capitalism and democracy are resilient and adjust. Capitalism co-opts opposing forces and sells you their merchandise. Democracy caters for both stability and upset.

As ideologies democracy and capitalism present competing visions of humanity’s relationship with power. Democracy is the belief that power should be spread equally between people, to avoid its accrual and society’s corruption at the hands of disproportionately empowered individuals. Capitalism is the countervailing belief that power, in the form of property and money, accrues variously, and that the right of an individual to enjoy the privately owned property and money at their disposal is a result of their relative contribution to society via the invisible hand of the market. In each view, power is moving in different directions relative to the individual. In democracy, power moves away from the individual and towards the collective. In capitalism, power moves towards the individual from the collective. In democracy, the individual is a unique participant in order to be a co-recipient. In capitalism, the individual is co-producer in order to be a sole consumer.

Both democracy and capitalism are fundamentally concerned with the act of ordering the world itself, as opposed to starting off with a desired order or state and then working backwards. They are protean, pursuant to other ideas and ends, concerned with determining and maintaining abstract systems to answer the practical questions of what should be done, how it should be done, with what and by whom, rather than being ideals to be achieved purely for their own sake.

At the same time the outcomes of capitalism through market activity and democracy through the democratic process must be respected because these outcomes are indirectly the respect of the ideologies in themselves. If outcomes are not respected because they are seen as unfair, unjust or poor value, democracy and capitalism have feedback mechanisms through which they can change how they operate in order to provide what are hoped to be fairer, more just and more valuable outcomes. Capitalism has the feedback mechanism of the market. Democracy can involve voting through bills to extend voting and property rights to groups who previously did not hold them, or bills protecting investors and consumers from rogue actors in the market. Establishing how these bills are raised and passed into law involves a meta-level of rules and laws, for example the Westminster parliamentary procedures followed in the United Kingdom and other Commonwealth representative democracies. The feedback mechanisms of democracy through voting and of capitalism through market forces subject to democratically derived laws and their application through a judiciary form what could be thought of as the operative core of liberal democracy.

The means by which this feedback system works highlights a unique characteristic of both ideologies. Feedback is made possible by individuals directly interacting with capitalism and democracy via interfacing units of value that they use for their own benefit and according to their own beliefs. For capitalism the interfacing value unit is money; for democracy it is the vote. The various ideologies and systems of capitalism and democracy can be reduced down to and expressed in the ways in which the unitary values of money and the vote move around and determine outcomes based on the rules around their collective use. These value units and by extension the systems they inhabit are, by the nature of their ideologically competing visions of power, both symbiotic and in constant tension.

Although the refinement of democracy down to the vote is relatively straightforward, capitalism’s refinement down to money needs further elaboration in order to distinguish it from mere trade. Features of capitalism such as the division of society into capitalists and workers, free markets and the establishment of private property can be further reduced to money without dissolving capitalism’s essential characteristics. The Enlightenment philosopher and father of liberalism John Locke argued persuasively that private property is a natural right, obtained by an individual mixing their labour with nature and ordering it, therefore improving it towards the individual’s ends and entitling them to its produce. In a state of nature, unopposed by writs of law, our ancestors worked directly with the land to improve it and lay claim to the territory and its produce. Across the animal kingdom, animals claim and defend territory if intruded on by a rival. Money can be reduced to both an abstraction and representation of property that allows for control and exchange to occur in a more complex and large scale society without relying on unwieldy bartering or a contest of force and is therefore of mutual benefit to all. Holding money, even temporarily, is a form of private property ownership or at the very least stewardship, and an individual may choose to dispose of the money they hold as they wish. The spending of money in microcosm is itself an enactment of class relations within the free market. The capitalist is the holder of money, the worker is the receiver, exchanging their labour and its products for money in a voluntary and mutually beneficial exchange, however unequal or exploitative the wider social relations may be. As money is a principal fuel for the operation of the means of production and an individual in themselves is the primary means of production in the world, it follows that we are all simultaneously both capitalists and workers. Although this is a highly reductive and simplified view, we can nevertheless see that key features of capitalism are latent or inherent in the nature of money itself. This is why we live in a state of Capitalist Realism, in which it is impossible to imagine a world beyond capitalism. It is equally impossible to think of a world without money and without exchange. If money was abolished, some other unit of value with money-like properties would have to be invented in order to assign value and enable exchange.

Having extracted the abstract values of money and the vote from their ideological structures we are now in a position to examine capitalism and democracy through a microscope, in their most reduced states. By asking what makes a vote a vote and what makes money money we can begin to identify their shared and distinct qualities and look to establish a set of axioms describing their relationship. With these axioms we can then start to build up an entirely new political economy, the Votive Economy, in the form of a single system or set of protocols in which money and the vote operate dialectically on a unitary value level. This approach steps through Fukuyama’s conclusion in that, rather than being ideological or based on historicism, it is focused instead on axioms, systems thinking and re-engineering how money and the vote interoperate at a platonic level.


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