MSTA Resolutions V.1.0
Editors: Marc Gauvin, Mark Heffernan, Jordan Soreff, Rúben Arranz. January 2020 – Last Revised April 11 2020
More than ever the thing we call money is currently itself being questioned unprecedentedly. The time has come for money to be objectively specified in a fair and transparent scientific fashion without disrupting our day to day ability to operate nor sacrificing our core rights and freedoms. To this end, we propose these simple Resolutions that can be briefly summarised by recognising the need for money to be properly specified and how in the interim we can render our current use of money “passive” in the formal scientific sense of the term. Passivity will ensure our uninterrupted day to day use of money as a valid record of what each of us do and achieve in the economy without itself being the ultimate distorting goal that it is today. Just as the scoreboard of a sports event “passively” and accurately reflects the play without determining how people behave to achieve their “goals”, so too ensuring that our money system fulfils the formal requirements of “passivity” it can serve to provide all of us valuable information, without itself or its systemics interfering with what we choose to do or how we choose to do it.
Misrepresentation of Money:
Absent any formal definition of money and respective symbols (e.g. “$”) used in a wide array of contexts (e.g. dollar bills, checks and account entries) on similarly varied set of physical supports (e.g. paper, computer memory) and as an object of different contracts (e.g. mortgages, loans, derivatives, etc.), we are unable to identify any determinate relation between money denoted by such symbols and the value inherent in public or private goods and services money is expected to represent. As a consequence, obligations, agreements or contracts in terms of such “$“ units are commensurately indeterminable such that a logical, fully reasoned and hence just rule of law is impeded. Just as any mathematical expression is rendered indeterminate if its variables are not fully and unequivocally defined in terms of the reality in which they are to be applied, so too mathematical expressions in terms of units of money are rendered indeterminate, unless those units are unequivocally defined in terms of our common reality to which they are expected to be applied.
Common practice has adopted a notion of money where it is implicitly and explicitly assumed to be both a record/measure of value AND a commodity/tradable good without noticing how these two notions (measure/commodity) are, by logic, mutually exclusive. Such a logical misrepresentation, once identified and by the most fundamental principles of law and justice, must render any contracts in terms of such a notion invalid. To continue business as usual in spite of this revelation is to arbitrarily subject one or other parties directly or indirectly to unknown, incalculable and/or undeclared consequences and imperatives.
As a consequence of the mere knowledge of this common misrepresentation, again by principles of law, it also becomes incumbent on all parties to contracts involving “money” to seek remedy by proactively assisting in providing a logical and independently evaluable (valid) definition of money for contracts.
Resolution 1 (Correction of Money’s Misrepresentation by Legal Imperative)
We thus seek, as set out by the Money Systems Transparency Alliance (MSTA), to immediately set out to pursue and assist all technical and legal avenues to resolve the aforementioned logical anomaly, and to do so in relation with the highest monetary authorities i.e. Central Banks, leading banking and investment houses and related stake holders, by way of the necessary open ratification and publication of a valid formal logical definition/specification of money, its function, scope of use and corresponding logical requirements. This formal logical definition/specification of money shall be done in terms of independently determinable criteria. For example, money’s definition cannot be circular (i.e. in terms of itself, also known as “false confirmation”) but rather must be in terms of the reality in which it, money, is to be operated on and applied.
Resolution 2 (Immediate (Interim) Imposition of Formal Passivity):
Pursuant to the above and with the aim of eliminating all and any direct or associated adverse effects and consequences arising from implementing money under its commonly assumed current misrepresentation, we move to IMMEDIATELY adopt an interim logical “Passive” specification of money’s current use in the formal scientific sense of the term as follows:
- That money’s logical function shall be strictly limited to that of a record/annotation of the “value” attributed to goods and services transferred between parties in transactions and denominated using the common unit symbol “$”.
- Thus money shall be created on account to represent value given in the form of “goods and services” pending future reciprocation of “goods and services” of commensurate value and money shall be cancelled on account upon value being reciprocated.
- Related Balances of such “moneys” shall be kept by all stakeholders (e.g. Central Bank, associated banking or credit institutions, public administrators and interested parties etc.) along with periodic issuance of statements as required.
- In order to maintain a system of any number of such transactions “passive” according to the formal requirements of passivity the following shall be observed:
- Money is defined as an annotation of value expressed in currency units (e.g. $) and only comes about as a result of transactions after the fact.
- There is no prior circulation, supply or demand of units required.
- Each transaction generates its own independent units that are later resolved against existing balances (see creation and cancellation of money above).
- The sum of money in a system of any number of such transactions at any given point of time, represents all non reciprocated value (risk measured in currency units) and at all times is equal or less than the sum of input “cost”/”prices”, thus conforming to Passive BIBO criteria for sampled LTI Systems.
- Value transacted may never be unilaterally determined.
- To avoid systemic distortion of the common perception of value by systemic compounding, the cost/price of all associated money (banking) services (e.g. maintaining of accounts, risk consultancy, etc.) must be attributed solely in terms of their own value and never as a percentage commission of the sums of value attributed to other transactions.