That flow of generosity can lead to burnout. Gift giving is very customary among social groups of a certain scale, one at which people can have a general sense of who they can know by reputation at least — the zone of trust. When a social solution for a larger segment of society is designed to rely on giving it is not very stable or sustainable. We put these solutions to work in times of crisis, when we don’t need a long term, sustainable solution; we need an immediate, stop-gap solution. In these times of impassioned concern we fill sandbags for levees or pass buckets to quench a blaze, and we never ask what we’ll get in return — which is appropriate to those circumstances.
Some crises, though, are not as simple as a single flash flood or wildfire. Some states of crisis are a part of a larger systemic flaw which ensures continual iterations of destruction. We can’t keep up these efforts forever; break-neck altruism is temporary by nature. When one crisis is over — or sometimes before — we have to go back to our lives. Too frequently this means returning to an occupation which — to one extent or another — is furthering the patterns which created the crisis.
Fire follows flood … follows fire.
We need a set of cultural, economic, and social tools that draws from a well other than business-as-usual. The Favor is one such tool.
In the wake of the first World War, and as the ripples of the Great Depression began to disturb the European economy even further, a few business owners got together and decided that as long as they had resources and skills to share they wouldn’t let any crisis in the governments, the banks, or the outside economy stop them from doing business. They created a simple credit ledger in which all participants started at zero. They began to do business in a currency they simply called the Wir Frank (Our Money). Each member could go a ways into debt, to a degree determined by consensus. This allowed others to be able to sell their offerings. There is no interest on any of the debt, which removes the common incentives to stay out of debt. In the WIR banking system, the idea isn’t to accrue money. Money simply exists to make sure that everyone’s needs are met.
For the first decade, there were only a handful of members in the WIR Bank. Today there are over 62,000 members engaging in the equivalent of over three billion USD in annual trade within the WIR Bank. And, they enjoy the highest degree of financial stability in the world.
The Favor Solutions Network seeks to bring this elegant set of financial mechanics to Colorado’s Front Range, in response to the COVID-19 crisis, and to prevent people suffering from unnecessary economic debilitation from future situations of crisis further down our path.
The Favor Solutions Network is a non-capitalist, non-socialist, free-market system. By non-capitalist, we mean that no interest can be charged in service to debt.
Capitalism serves the holders of capital, rewarding their allowance of access to capital with greater returns than those for any other service in the economy. Access to capital is a service, but it has been artificially made superior to all other services.
By non-socialist, we mean that no appropriation or redistribution of privately held credits will ever occur. Further, no increase in access to credit will be granted on the basis of select identity. The network neither privileges nor penalizes anyone on the basis of socio-economic class, gender, sex, sexual-orientation, diagnosis, or any other aspect of circumstantial, conditioned, or volutary identity.
The Favor Solutions Network is designed to value our gifts and to facilitate sharing our gifts with others. The system doesn’t need to be designed to do anything else. Our unique gifts as individuals make other goals possible.
Individual members may do with their credits what they like. Members may also form groups to do what they like. An individual creating an investment for themselves and others is different than an authority designing a system to disproportionately reward financial risk. An individual or group creating giving circles and being generous is different than an authority taking from the productive to give to those it decides are more deserving. So, the Favor Solutions Network is empowering people to fulfill the beautiful and noble personal drives which underpin the motivations which people feel that motivate them toward capitalism and socialism.
Within the network, members make purchases of goods and services from each other as they desire. The network takes a 1% network management fee from each party and tracks the exchanges in a centralized ledger. Necessarily, member balances can go — and remain — negative without incurring interest. The network itself holds an account within the system into which transaction fees are paid.
The network does not seek to limit mixed currency exchanges, currency arbitrage, or to govern its member’s pricing policies.
The above mechanics of the network cannot be changed or used by the central governing body to serve any other purpose outside of allowing interest free monetary issuance, least the network come to great harm. Many other details of the network’s operations, though, do remain open to question.
The Favor allows people a simple way to receive goods and services which aren’t available to be freely given. Free gifting can be strained by the size of a community, circumstantial collective feelings of scarcity, or simple practical need for immediate reciprocity. In times of severe economic retraction, central bank currency can become scarce. Even when it isn’t scarce, it is very expensive. The average dollar is paid for at a rate of about 300% (which is why there is so much more debt than money in the economy).
Capitalism, the strictly hierarchical system of monetary issuance and interest securement based on interest baring debt and interest collection for ownership, harms the common people in both growth and recession. But, in recession, the pain felt by those who own the least debt and capital becomes more severe. Money becomes scarce, and — even in environments where resources and talents are abundant — the people’s needs go unmet for lack of a basic medium of exchange.
Those who’ve had the free-time and good fortune to establish trusting relationships, surpluses of resources, or both may endure in a little more ease. While those who have been doing their best within the business-as-usual model — but have not been gifted with the skills or fortune to meet success — are left to suffer. Often they have made no greater mistake than doing their best to do what authority figures have told them: “Go to college, work hard, keep your head down, get a good job, dress for success.”
Socialism, the removal of wealth from one plutocratic authority by another in order that it be employeed in efforts which seek to make everyone the same. Such a system — which is necessarily managed by the same heads of state who have sold so many decisions to the highest bidders — cannot be relied on to uplift any community. All socialist measures are stop-gap solutions at best. It is a medicine which, taken too long, weakens the very people it is meant to empower. It is just another overly-centralized model, a way for people to distance themselves from the burden of POWER, also known as responsibility.
The Favor is an opportunity for people to get some of their needs met outside of dollar obligate exchange. This, in turn, allows people to spend more of their dollars on things that have to be paid for that way: rent, mortgage, utilities, loan servicing, et cetera. It is one tool to relieve the crushing weight of this collapsing house of cards.
The Favor Solutions Network exists at an aggregate balance of zero credits to debits, system wide.
It is a transparent lie which we have heard many capitalists tell about zero sum games that they are finite. Anyone who considers the math for even a moment may realize that a zero sum game can grow just as easily as any other — just as easily as one can realize that no one can pull themselves up by their bootstraps.
Each party in a transaction pays one percent of the transaction value to the network to cover maintenance costs.
Example: Morgan buys an f100 tent from Chris. Morgan spends f101 and Chris receives f99. The network receives f2.
Maintaining a system like this has costs, but by automating everything which can be, and eliminating systemic bloat we will be able to keep those cost several orders of magnitude lower than the cost of issuance for central bank currency.
Upon entry into the network, each member is given a credit limit at the discretion of the steering committee.
Factors in the determining may include, but are not limited to:
The steering committee will need to determine criterion for the raising of credit limits for extant members. Possible criteria include:
Factors which should probably not be considered for the sake of others in the network:
Instead of considering degree of need and membership in groups commonly disenfranchised by the business-as-usual world as criterion for a high credit limit, the members of the network are free to support individuals and to encourage the support of individuals for such reasons.
Considering that a credit limit is just the degree of debt that a member can incur, there is no service being done by extending someone a credit limit beyond their means.
Importantly, there is no upward balance limit. A member can join, be given a f(-100) credit limit, and carry a balance of f8029. The credit limit is just the limit on how far a member can go into debt.
Outside of the core issuance mechanics, all non-essential aspects of the system should be kept adaptive. The world may very well keep changing at this rapid a pace. COVID-19, and all of the social changes which are occurring globally because of it, could very well be the beginning of a spiral of catastrophes and regenerations which do not slow in pace for a decade or a century.
If this solution is going to be sustainable some provision for absolution of debt, while keeping the system at a zero balance, ought to be made. Such a provision could reasonably be quite extreme, given that debt in the favor system incurs no interest.
Relatedly, the Network must take measures to protect itself from duplicate accounts and other attempts to defraud members.
One pattern which could ensure that the Favor remains supple and responsive to change could be the establishment of a strict limit to the size of the network. One network could split and become two at a certain size, and provisions could be made for exchange between networks which share basic common mechanics.
The standard practice in barter networks is to collect a w-9 from all members upon admittance. This can limit access in ways which we might not intend. And, as long as the organization keeps records of all transactions using industry standard matter-of-record practices, and makes tax documentation available to all members, it may be able to stay out of trouble with the IRS. This, potentially providing that the organizations cooperates with any investigation which does occur.
This is not enough of a concern to forestall initiation.
These questions will need to be addressed with a CPA, though, before the organization can scale to any significant impact.
In order to support the currency, or by request of a member, it may be beneficial for steering committee, an individual member thereof, or a delegated party to broker an arrangement between members.
In isolation, and in the beginning, this is not a big deal. If it were to occur frequently, the 2% transaction fee would not be nearly sufficient in many cases to compensate for the effort involved. Continuing to broker exchanges without adequate compensation beyond the early days of the system could lead to system failure.
The steering committee may elect to offer brokerage as a service, or to seek members to perform this service.
The steering committee ought to maintain the authority to make exchanges of Favor credit for other currencies, including central bank currency, and to reimburse its own member and other network members for expenses and efforts in service to the Network.
The terms by which these matters are handled are an open question, but incompleteness or disagreement in these matters should not ever be allowed to interfere with implementing practical solutions. If the Network is operating then people’s needs are being met. Idealogical agreements can continue to be sought after by those who are fed, sheltered, and healthy.
## Taxonomy <span class="type__taxonomy-title">The Favor Solutions Network</span> The full name for the total body of members and the system itself, its mechanics, by-laws, and the brand. <span class="type__taxonomy-title">Favor/Favors</span> The name of the currency. Favors are denominated by a lowercase 'f' followed by an integer: f238 is two-hundred-thirty-eight favors. There is no change equivalent in the Favor banking system, no f65.23\. It is superfluous, and runs the risk of violating some antiquated laws passed during the Civil War. A negative balance is best designated in parentheticals, potentially including a minus mark (or hyphen) to diminish ambiguity: f(452), f(-452). Developing a canonical form would be ideal, though not pressing.