ECUADOR INITIATIVE: Transition Proposals Toward a Commons-Oriented Economy and Society
Sponsored by the National Institute of Advanced Studies of Ecuador, carried out by the Free/Libre Open Knowledge (FLOK) Society.
Marc Gauvin is actively engaged in the Ecuador endeavor. Establlishing true value is as important as establishing true cost — the first is social value, the second ecological value.
B.I.B.O. is an acronym referring to “Bounded Input Bounded Output” The sine-qua-non requirement for stability in the types of systems that include any money system. Passivity refers to a particular case of BIBO where output never exceeds input or in the case of currency, debt is always less or equal to prices i.e. money is not a negotiable object as explained in this document).
BIBO precisely defines stability in Control Systems Engineering. Understanding BIBO as applied to money systems is crucial as it provides a powerful basis for logically dispelling the current false money paradigm. It explains why almost everything we have been conditioned to believe about money is logically and mathematically inconsistent and the exact opposite of what is scientiically required to bring stability to money. The conclusion of having applied Control Systems and Stability theory to money can be best summarised by the following theorem:
A Passive BIBO Stable Money System by definition implies that all of the system’s component Transactions are also necessarily Passive BIBO Stable. Therefore, it directly follows that:
“If every Transaction is Passive BIBO Stable and all money created is necessarily a product of such Stable Transactions, then, all such units will necessarily maintain a Bounded ratio with all system inputs to those Transactions and therefore the units also will be stable by definition!” – Marc Gauvin and Sergio Dominguez – 2011 –
The significance of the above cannot be emphasised enough, as the math of stability categorically dictates that for the unit to be stable:
- It matters not who performs the Transactions that generate Currency
- It matters not when the Transactions are performed
- It matters not what Wealth is Transacted
- It matters not why we Transact Wealth
- It matters not how many units are generated
ALL THAT MATTERS FOR UNIT STABILITY, IS THAT THE TRANSACTIONS THAT GENERATE THE UNITS ARE PASSIVE BIBO TRANSACTIONS. ABSOLUTELY NOTHING ELSE MATTERS!
In layman terms, this means that stability of money has nothing to do with controlling the creation, quantity or flow of money but rather, it is determined solely by the nature and definition of transactions the value of which is measured in currency units. If all transactions are Passive BIBO Stable then the currency created through transactions will also be stable.
Essentially, the scientific conclusion is that the suppression of peoples commercial autonomy and freedom is NOT required in order to maintain a stable and trustworthy currency. On the contrary, it is only by allowing people to create money as they exchange real goods and services in stable transactions that both stability of the unit and prosperity can be achieved.
Finally, once the application of Passive BIBO stability is fully understood, we then can proceed to expose the rest of the false money paradigm for what it really is. In short, the whole idea of money as a scarce resource and a unit of measure is shown to be completely irrational. The simple reason is, that if money is a resource of variable value as a function of its relative scarcity, then it can no longer serve as a measure of value because in order to do so, it would need to measure itself in varying quantities of itself which is simply insane.