Who do you trust? Hubba hubba hubba!

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SmartMobs points to the Reputation Research Network, which studies the ways in which online systems generate trust between parties unknown to each other. This is also an area where libertarian economist Dan Klein has done an enormous amount of insightful work.

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  1. David Friedman anticipated a lot of this. What we need is e-cash, which would undermine a lot of what the government does

  2. there already is digital cash. the problem is the positive network externalities that derive from widely circulated currencies creates a barrier to entry due to first mover advantage.

    in other words, for most people the dollar is good enough, rendering competing currences — like corporate scrip (frequent flyer miles, disney bucks, et. al.) and community currencies (ithaca HOURS, LETS teifis) — to niche markets. namely stateless, digital, anonymous cash like e-gold or the DMT rand, although they’d rather not say, are mainly used so far to avoid detection and taxation, which tends to attract less than savory customers… obtaining a more upscale clientele remains a marketing challenge as it were.

    unless you have a complete collapse in global finance and a subsequent long run global depression there is not likely to be significant changes in the usage patterns and characteristics (nationalized, fiat-based, reserve currencies administered by central banks) of the money we used now any time soon. during the depression there were several monetary “experiments” that fluorished (worgl, hobo nickels, etc.) and after the war intriguing possibilities like benjamin graham’s commodity buffer stocks that may have been implemented, but alas we have what we have. undoubtedly imperfect, but by the same token imminently functional 😀

  3. gintis & bowles have also done a ton of work in this regard, e.g. social capital and community governance. benkler has also done some interesting work as well, e.g. coase’s penguin.

  4. Thanks for the info, Mysterious Stranger. I always appreciate tipoffs on new community currency info. I’d never heard of hobo nickels. As for Worgls, is that the town that tried some kind of demurrage currency based on Gesell’s ideas?

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