On Designing a Community Currency  (replace with http://eroei.blogspot.com/2013/07/we-need-new-monetary-system-complete_11.html)

Thomas L Wayburn, PhD

This is a draft – nay, a draft of a draft.  – Herman Melville, Moby Dick [quoted from memory]

To walk in money through the night crowd, protected by money, lulled by money, dulled by money, the crowd itself a money, the breath money, no least single object anywhere that is not money, money, money everywhere and still not enough, and then no money, or a little money or less money or more money, but money, always money, and if you have money or you don’t have money it is the money that counts and money makes money, but what makes money make money?  – Henry Miller, Tropic of Capricorn

Economic Value


The best monetary system is no monetary system at all.  However, for people who insist upon retaining the mean-spirited notion of tit for tat, every economic good or service must be assigned a value to ensure that no one gets more than anyone else and no one gets a free ride.  Probably, though, until people learn to identify economic success with minimal consumption of valuable resources, it will be necessary to place a value on economic goods and services, if for no other reason, to enable economic actors to evaluate their own success in minimizing consumption.

A rational system of assigning value should be based upon realistic physical quantities.  Each of the following fundamental physical quantities cannot be measured in terms of the other two, whereas every economic good or service can be evaluated in terms of land [1], energy, and time [2].  For the mathematically inclined, we may take land, energy, and time to be a linearly independent set of basis vectors in the three-dimensional vector space of economic value.  We shall dispose of land as an economic quantity early on by insisting upon equality and permanence; therefore, we need not consider land area in designing a new and rational currency.  Therefore, our new rational currency will be denoted in terms of an ordered pair, the first element of which is a quantity of energy and the second element is a quantity of time, thus, (energy, time).  These may appear in an infinity of combinations and, thus, cannot be represented on coins or paper bills.  However, nowadays, economic transactions are recorded by computers; and, therefore, each may be assigned a unique ordered pair if necessary.  Undoubtedly, an optimal number of decimal places or significant figures will be chosen by the community.


We may assume, then, that every economic actor [3] in a community has been assigned a portion of contiguous land of equal value excluding the most desirable locations of all – normally coast lines, river banks, the best scenic outlooks, and the best locations for intensive energy collection, which will be retained by the community as part of the commons.  In many cases, this common land will be made available to economic enterprises owned in equal shares by their own workers according to the maxim that every worker should own his own tools – or, as stated in the ancient Hebrew rabbinical writings, a carpenter without tools is not a carpenter.  No person may control land upon which he (or she [3]) does not live or labor.  The land upon which men and women labor is held in common by all of the workers who labor upon that simply-connected (not disjoint) piece of land.


Energy is the most important fundamental economic quantity.  It should be the basis of every currency.  It is the life’s blood of every economy.  Howard T. Odum is famous for the following words: 

Real wealth is food, fuel, water, wood for houses, fiber for clothes, raw minerals, electricity, information, …

·        A country is wealthy that has more of this real stuff used per person.

·        Money is only paid to people and is not proportional to real wealth.

·        Prices and costs are inverse to real wealth.

·        When resources are abundant, standard of living is high, but prices low.

·        When resources are scarce, prices are high, more money goes to bring resources, a few people get rich, but the net contribution to prosperity is small.

·        Real wealth is mostly the work of nature and has to be evaluated with a scientific ... measure, emergy.

Therefore, to place a value on an economic good or service, the first quantity to be assigned is the emergy (with an M) or embodied energy [5].


The second element is time.  The only time a person has is the time of his life.  Clearly, every person’s life is equally valuable to himself.  Until a thousand years have passed after an individual has died, there is no valid way to evaluate his contribution to the community.  Therefore, every person’s time must be assigned the same value, namely, one hour per hour since time is fundamental and cannot be evaluated in terms of anything else, least of all money.

But, you say, “Some people spend many years in engineering school, medical school, apprenticed to a tailor, etc. preparing to render useful services to the community.  Clearly, the time of such people’s life when they render such services to the community must be compensated at a higher rate than the time of unskilled laborers with no preparation.”  This can be finessed in the following way:  Time spent learning a skill must be compensated at the same rate as it will be compensated when they are rendering service to the community.  Thus, if a person spends 1000 hours [6] in classrooms being instructed in the great art of engineering with an average of nine other people, he will have earned 900 hours that he can use to support himself and others until he is able to contribute time practicing engineering.  (Each student contributes 100 hours to the time spent by the professor.)  In addition, he will spend about 2000 hours studying alone.  This too represents earned time with which he can buy books each of which carries a price tag composed of the emergy and the time that went into its construction by the author and the book binder to name only two.


For now, suffice it to say that I will present this essay to a Yahoo group where the topic of community currencies is discussed and to a few friends for comments.  This is a first draft – nay, a draft of a draft.

Houston, Texas

January 4, 2007


1. Since the vast majority of all primary energy comes from the Sun, energy can almost be related to land area and the yearly average rate of insolation.

2. It occurs to me that we might not wish to compute the energy equivalent of the amount of fresh water degraded in an economic activity, in which case water will be represented by an additional component of the value vector.

3.  Dependent children are not economic actors.

4. In this essay, the pronoun ‘he’ shall be understood in the sense of ‘he or she’; therefore, that awkward construct will not appear again.

5.  In this essay, and in the rest of my writing, the term energy refers always to either Gibbs availability or Helmholtz availability depending upon context.  Please see http://www.dematerialism.net/Chapter%202.html#_Definitions.

6.  The number 1000 is chosen for convenience in writing this essay not as a reflection of the actual time needed to learn engineering.