Freedom Box is the name we give to a free software system built to keep your communications free and private whether chatting with friends or protesting in the street. Freedom Box software is particularly tailored to run in “plug servers,” which are compact computers that are no larger than the power adapters for electronic appliances. Located in people’s homes or offices such inexpensive servers can provide privacy in normal life, and safe communications for people seeking to preserve their freedom in oppressive regimes.

Why Freedom Box?
Because social networking and digital communications technologies are now critical to people fighting to make freedom in their societies or simply trying to preserve their privacy where the Web and other parts of the Net are intensively surveilled by profit-seekers and government agencies. Yet, instead of technology supporting these new modes of communications, smartphones, mobile tablets, and other common forms of consumer electronics are being built as “platforms” to control their users and monitor their activity. Freedom Box exists to provide people with privacy-respecting technology alternatives that enable normal communication in normal times, and that offer ways to collaborate safely and securely with others in building social networks of protest, demonstration, and mobilization for political change in the not-so-normal times. Imagine if your next wireless router, or settop box, or other small computing device came with extra features. It knew how to securely contact your friends and business associates, it stored your personal data, securely backing it up and generally maintaining your presence in the various networks you have come to rely on for communicating with people in society. Such a box would not only make your participation in network communication easier in your daily life, increasing your privacy and the security of computers in your life, it would have many unique advantages during times of crisis.

Such a box could help in disasters by creating a mesh network with your neighbors to replace the centralized internet connections that go out with the lights or are cut by hostile governments. Such a box would make it harder for governments and invasive corporate interests to reach your data and casually profile you for their own uses. Such a box would also let you lend aid to friends in need by sharing your unfettered internet access with those trapped behind government firewalls that prevent them from learning about the world or speaking plainly to it. Such boxes exist in the form of plug computers and mesh routers, tiny, inexpensive machines that can take the place of other electronics in your life, that draw so little power (often as little as 5W) that they can be run off of batteries or solar panels. We even have free software, software meant to empower and support individuals, to do all of the things mentioned above.

What we need is the glue to hold all of that together, the architecture of which pieces stack together in which way to turn a collection of possibilities into an appliance so easy to use that you forget you even have one, at least until that moment when you really need it. The FreedomBox Foundation was built to put this all together. It was started by community leaders with long track leaders and lives as a community project. But the past few months have shown us all that there are millions of people around the world who need such a device now and we need to pick up the pace and get them made so that next time, our friends have some help. That is why we are asking for your help.

In Need of Community Angels
There are many people out there, in many different communities, who feel the same way we do about profiling, internet kill switches, and the need to give people greater independence in their network communications, but turning all that interest and the offers of help into a real software suite is going to take coordination, organization, and bringing people together in focused groups to get this system built. That is why the FreedomBox Foundation was created, but it requires real work and a real demonstration of community size and support to keep everything moving. If we can meet our funding goal now, we can start doing that work full time, build road maps for the core components, and put together a series of conferences/hack days to pull the community together. The Freedom Box is a community based endeavor from the ground up. That includes everything from architecture and engineering through to administration and funding. It’s the reason why we’re seeking the first round of investment from our own community. We want it to be clear that this project begins and remains in the hands of the people who give it life at every stage and in every part of the project. Almost all the software we need to make this work is already out there in the free software world, but if we are going to pull it all together, first we need to get up to speed. Please join us and help keep the momentum going from 0 to 60!

When will we get the software?
The release timeline for this software depends a good deal on how much support we can gather this month, which is why we are reaching out now. If we can reach our goal, we hope to release a first version of the software six months later. This is our best working etimate but we will know a lot more in the next 30 days and will continue to update everyone here and on the Foundation’s website. If you are pledging enough for any of the software rewards ($50 and up), know that we hope to have everything shipped out within in week of the 0.1 release, if not on the release day itself, and please keep your eye here and on the Foundation site for updates.

What will Freedom Boxes do?

A plug server or other digital appliance in your home running the Freedom Box software can provide many services to you and your friends, automatically and securely. The following is a short list of the services we think are important:

  • Safe social networking, in which, without losing touch with any of your friends, you replace Facebook, Flickr, Twitter and other centralized services with privacy-respecting federated services;
  • Secure backup: Your data automatically stored in encrypted format on the Freedom Boxes of your friends or associates, thus protecting your personal data against seizure or loss;
  • Network neutrality protection: If your ISP starts limiting or interfering with your access to services in the Net, your Freedom Box can communicate with your friends to detect and route traffic around the limitations. Network censorship is automatically routed around, for your friends in societies with oppressive national firewalls, or for you;
  • Safe anonymous publication: Friends or associates outside zones of network censorship can automatically forward information from people within them, enabling safe, anonymous publication;
  • Home network security, with real protection against intrusion and the security threats aimed at Microsoft Windows or other risky computers your network;
  • Encrypted email, with seamless encryption and decryption;
  • Private voice communications: Freedom Box users can make voice-over-Internet phone calls to one another or to any phone. Calls between Freedom Box users will be encrypted securely;

Freedom Boxes can do anything that computers running the Debian GNU/Linux free operating system can do, which means they have full access to thousands of applications packages. Freedom Boxes are Debian server systems specially configured to provide users with privacy-protection and safe communications services. Freedom Boxes will become more capable with time, because they can upgrade themselves safely and securely using well-tested and stable automatic upgrade mechanisms already deployed in hundreds of thousands of Debian and Debian-descended installations around the world.

Freeing the Internet one Server at a time
by Steven J. Vaughan-Nichols / February 16, 2011

Free software isn’t about free services or beer, it’s about intellectual freedom. As recent episodes such as censorship in China, the Egyptian government turning off the Internet, andFacebook’s constant spying, have shown, freedom and privacy on the Internet are under constant assault. Now Eben Moglen, law professor at Columbia University and renowned free software legal expert, has proposed a way to combine free software with the original peer-to-peer (P2P) design of the Internet to liberate users from the control of governments and big brother-like companies: Freedom Box.

In a recent Freedom in the Clouds speech in NYC, Moglen explained what he sees as the Internet’s current problems and his proposed solution. First, here’s the trouble with the Internet today as Moglen sees it:

[6:13] “It begins of course with the Internet. Designed as a network of peers without any intrinsic need for hierarchical or structural control and assuming that every switch in the net is an independent free standing entity who’s volition is equivalent to the human beings who control it … But it never really worked out that way.”

The Software Problem [7:18]: “It was a simple software problem and it has a simple three syllable name. Its name was ‘Microsoft’. Conceptually there was a network which was designed as a system of peer nodes, but the operating software … that came to occupy the network over the course of a decade-and-a-half was built around a very clear idea that had nothing to do with peers. It was called ’server/client architecture’.”

The Great Idea Behind Windows [9:22]: “It was the great idea of Windows, in an odd way, to create a political archetype in the net that reduced the human being to the client, and created a big centralized computer, which we might refer to as the server, that provided things to the human being on ‘take or it leave it’ terms. And unfortunately everyone took it because they didn’t know how to leave once they got in. Now, the net was made up of servers in the center and clients at the edge. Clients had quite a little power and servers had quite a lot … As storage gets cheaper, as processing gets cheaper, as complex services that scale in ways that are hard to use small computers for … the hierarchical nature of net came to seem like it was meant to be there.”

Logs [10:44]: “One more thing happened about that time … Servers began to keep logs. That’s good decision … But if you have a system which centralizes servers, and the servers centralize their logs, then you are creating vast repositories of hierarchically organized data about people at the edges of the network that they do not control, and unless they are experienced in the operation of servers, will not understand the comprehensiveness of [server-collected user data.].”

The Recipe for Disaster [12:01]: “So we built a network out of a communications architecture designed for peering, which we defined in client server style, which we then defined to be the dis-empowered client at the edge and the server in the middle. We aggregated processing and storage increasingly in the middle and we kept the logs — that is information about the flows of information in the net — in centralized places far from the human beings who controlled or at any rate thought they controlled

This ended up creating “an architecture that was very subject to misuse, indeed it was begging to be misused. Now we are getting the misuse we set up…There are a lot of reasons for making clients dis-empowered … There are many overlapping rights owners, as they see themselves, each of whom has a stake in dis-empowering a client at the edge of the network. To prevent particular hardware from being moved from one network to another, to prevent particular hardware from playing music not bought at the monopoly of music in the sky.”

In particular, Moglen has no love at all for Facebook. “The human race has susceptibility to harm but Mr. Zuckerberg has attained an unenviable record. He has done more harm to the human race than anybody else his age. Because he harnessed Friday night, that is, ‘Everybody needs to get laid,’ and turned into a structure for degenerating the integrity of human personality and he has to remarkable extent succeeded with a very poor deal, namely ‘I will give you free web-hosting and some PHP doodads and you get spying for free all the time.’ And it works.

How could that have happened? There was no architectural reason. Facebook is the web with, ‘I keep all the logs, how do you feel about that?’ It’s a terrarium for what it feels like to live in a Panopticon built out of web parts. And it shouldn’t be allowed. That’s a very poor way to deliver those services. They are grossly overpriced at ’spying all the time’, they are not technically innovative. They depend on an architecture subject to misuse and the business model that supports them is misuse. There isn’t any other business model for them. This is bad. I’m not suggesting it should be illegal. It should be obsolete. We’re technologists we should fix it.”

So, what’s the solution to this client/server architecture and all the abuses against freedom and privacy it enables? Moglen turns to inexpensive server hardware. He told the New York Times that “cheap, small, low-power plug servers,” are the start. These are small devices “the size of a cellphone charger, running on a low-power chip. You plug it into the wall and forget about it.” Almost anyone could have one of these tiny servers, which are now produced for limited purposes but could be adapted to a full range of Internet applications, he said. “They will get very cheap, very quick,” he continued, “They’re $99; they will go to $69. Once everyone is getting them, they will cost $29.”

Such plug-in servers are already shipping. They include the TonidoPlug, theSheevaPlug, and GuruPlug.

The point of these Freedom servers is to address the privacy and control issues of “social networking and digital communications technologies, [which] are now critical to people fighting to make freedom in their societies or simply trying to preserve their privacy where the Web and other parts of the Net are intensively surveilled by profit-seekers and government agencies.” This needs to be done “Because smartphones, mobile tablets, and other common forms of consumer electronics are being built as ‘platforms’ to control their users and monitor their activity.”

What runs on these plug servers is where Linux and open-source software comes in. The one firm software decision that’s been made so far is that the base operating system will be the latest release of Debian Linux This version of Debian is the one that, for better or worse, contains no proprietary hardware drivers or software.
You say you want a revolution?
by Dan Goodin / 17th February 2011

Concerned about Facebook, Google, and other companies that make billions brokering sensitive information, free-software champion Eben Moglen has unveiled a plan to populate the internet with tiny, low-cost boxes that are designed to preserve individuals’ personal privacy. The Freedom Box, as the chairman of the Software Freedom Law Center has christened it, would be no bigger than power adapters for electronic appliances. The inexpensive devices would be deployed in a peer-to-peer fashion in homes and offices to process email, voice-over-IP communications, and the sharing of pictures, among other things. The decentralized structure of the devices is in stark contrast to today’s biggest internet providers, which offer the same services in exchange for users turning over some of their most trusted secrets. Public enemy No. 1 is Facebook founder Mark Zuckerberg, who in Moglen’s eyes, “has done more harm to the human race than anybody else his age.”

“He has to remarkable extent succeeded with a very poor deal, namely ‘I will give you free web-hosting and some PHP doodads and you get spying for free all the time,’” Moglen said during a meeting last year of the Internet Society’s New York branch. “And it works.” As Moglen envisions them, Freedom Boxes would be used to perform a wealth of services that most of the world has been brainwashed into believing are better performed in the cloud. Secure backups that automatically store data in encrypted form would be performed on the Freedom Boxes of our friends, just as their encrypted data would be stored on ours. The boxes would also be used to send and receive encrypted email, VoIP calls, and to act as a safer alternative to social-networking sites such as Facebook and LinkedIn. The guts of the boxes would be the Debian distribution of Linux, along with countless free applications that would presumably be developed under the same model as most of today’s open source software.

The Freedom Box website gives no timeline for delivery, but Moglen told The New York Times that he could build version 1.0 in one year if he could raise “slightly north of $500,000.” The cost of plug-in devices is about $99 right now, but Moglen said they’ll eventually sell for about $29. They’ll run on a low-power chip. “You plug it into the wall and forget about it,” he told the NYT.

With Facebook and Twitter getting credit for fomenting protests and revolutions in the Middle East, Moglen says the ability to connect online carries immeasurable promise. But right now, most of the organizing is taking place on centralized, for-profit websites with ethics that can easily be compromised. “As a result of which, we are watching political movements of enormous value, capable of transforming the lives of hundreds of millions of people, resting on a fragile basis, like, for example, the courage of Mr. Zuckerberg, or the willingness of Google to resist the state, where the state is a powerful business partner and a party Google cannot afford frequently to insult.”

Eben Moglen
email : moglen [at] columbia [dot] edu

Software Freedom, Privacy, and Security for Web 2.0 and Cloud Computing
A Speech given by Eben Moglen at a meeting of the Internet Society’s New York branch on Feb 5, 2010

It’s a pleasure to be here. I would love to think that the reason that we’re all here on a Friday night is that my speeches are so good. I actually have no idea why we’re all here on a Friday night but I’m very grateful for the invitation. I am the person who had no date tonight so it was particularly convenient that I was invited for now.

So, of course, I didn’t have any date tonight. Everybody knows that. My calendar’s on the web.

The problem is that problem. Our calendar is on the web. Our location is on the web. You have a cell phone and you have a cell phone network provider and if your cell phone network provider is Sprint then we can tell you that several million times last year, somebody who has a law enforcement ID card in his pocket somewhere went to the Sprint website and asked for the realtime location of somebody with a telephone number and was given it. Several million times. Just like that. We know that because Sprint admits that they have a website where anybody with a law enforcement ID can go and find the realtime location of anybody with a Sprint cellphone. We don’t know that about ATT and Verizon because they haven’t told us.

But that’s the only reason we don’t know, because they haven’t told us. That’s a service that you think of as a traditional service – telephony. But the deal that you get with the traditional service called telephony contains a thing you didn’t know, like spying. That’s not a service to you but it’s a service and you get it for free with your service contract for telephony. You get for free the service of advertising with your gmail which means of course there’s another service behind which is untouched by human hands, semantic analysis of your email. I still don’t understand why anybody wants that. I still don’t understand why anybody uses it but people do, including the very sophisticated and thoughtful people in this room.

And you get free email service and some storage which is worth exactly a penny and a half at the current price of storage and you get spying all the time.

And for free, too.

And your calendar is on the Web and everybody can see whether you have a date Friday night and you have a status – “looking” – and you get a service for free, of advertising “single: looking”. Spying with it for free. And it all sort of just grew up that way in a blink of an eye and here we are. What’s that got to do with open source? Well, in fact it doesn’t have anything to do with open source but it has a whole lot to do with free software. Yet, another reason why Stallman was right. It’s the freedom right?

So we need to back up a little bit and figure out where we actually are and how we actually got here and probably even more important, whether we can get out and if so, how? And it isn’t a pretty story, at all. David’s right. I can hardly begin by saying that we won given that spying comes free with everything now. But, we haven’t lost. We’ve just really bamboozled ourselves and we’re going to have to un-bamboozle ourselves really quickly or we’re going to bamboozle other innocent people who didn’t know that we were throwing away their privacy for them forever.

It begins of course with the Internet, which is why it’s really nice to be here talking to the Internet society – a society dedicated to the health, expansion, and theoretical elaboration of a peer-to-peer network called “the Internet” designed as a network of peers without any intrinsic need for hierarchical or structural control and assuming that every switch in the Net is an independent, free-standing entity whose volition is equivalent to the volition of the human beings who want to control it.

That’s the design of the NET, which, whether you’re thinking about it as glued together with IPv4 or that wonderful improvement IPv6 which we will never use apparently, still assumes peer communications.

OF course, it never really really really worked out that way. There was nothing in the technical design to prevent it. Not at any rate in the technical design interconnection of nodes and their communication. There was a software problem. It’s a simple software problem and it has a simple three syllable name. It’s name is Microsoft. Conceptually, there was a network which was designed as a system of peer nodes but the OS which occupied the network in an increasingly – I’ll use the word, they use it about us why can’t I use it back? – viral way over the course of a decade and a half. The software that came to occupy the network was built around a very clear idea that had nothing to do with peers. It was called “server client architecture”.

The idea that the network was a network of peers was hard to perceive after awhile, particularly if you were a, let us say, ordinary human being. That is, not a computer engineer, scientist, or researcher. Not a hacker, not a geek. If you were an ordinary human, it was hard to perceive that the underlying architecture of the Net was meant to be peerage because the OS software with which you interacted very strongly instantiated the idea of the server and client architecture.

In fact, of course, if you think about it, it was even worse than that. The thing called “Windows” was a degenerate version of a thing called “X Windows”. It, too, thought about the world in a server client architecture, but what we would now think of as now backwards. The server was the thing at the human being’s end. That was the basic X Windows conception of the world. it’s served communications with human beings at the end points of the Net to processes located at arbitrary places near the center in the middle, or at the edge of the NET. It was the great idea of Windows in an odd way to create a political archetype in the Net which reduced the human being to the client and produced a big, centralized computer, which we might have called a server, which now provided things to the human being on take-it-or-leave-it terms.

They were, of course, quite take-it or leave-it terms and unfortunately, everybody took it because they didn’t know how to leave once they got in. Now the Net was made of servers in the center and clients at the edge. Clients had rather little power and servers had quite a lot. As storage gets cheaper, as processing gets cheaper, and as complex services that scale in ways that are hard to use small computers for – or at any rate, these aggregated collections of small computers for – the most important of which is search. As services began to populate that net, the hierarchical nature of the Net came to seem like it was meant to be there. The Net was made of servers and clients and the clients were the guys at the edge representing humans and servers were the things in the middle with lots of power and lots of data.

Now, one more thing happened about that time. It didn’t happen in Microsoft Windows computers although it happened in Microsoft Windows servers and it happened more in sensible OSs like Unix and BSD and other ones. Namely, servers kept logs. That’s a good thing to do. Computers ought to keep logs. It’s a very wise decision when creating computer OS software to keep logs. It helps with debugging, makes efficiencies attainable, makes it possible to study the actual operations of computers in the real world. It’s a very good idea.

But if you have a system which centralizes servers and the servers centralize their logs, then you are creating vast repositories of hierarchically organized data about people at the edges of the network that they do not control and, unless they are experienced in the operation of servers, will not understand the comprehensiveness of, the meaningfulness of, will not understand the aggregatability of.

So we built a network out of a communications architecture design for peering which we defined in client-server style, which we then defined to be the dis-empowered client at the edge and the server in the middle. We aggregated processing and storage increasingly in the middle and we kept the logs – that is, info about the flows of info in the Net – in centralized places far from the human beings who controlled or thought they controlled the operation of the computers that increasingly dominated their lives. This was a recipe for disaster.

This was a recipe for disaster. Now, I haven’t mentioned yet the word “cloud” which I was dealt on the top of the deck when I received the news that I was talking here tonight about privacy and the cloud.

I haven’t mentioned the word “cloud” because the word “cloud” doesn’t really mean anything very much. In other words, the disaster we are having is not the catastrophe of the cloud. The disaster we are having is the catastrophe of the way we misunderstood the Net under the assistance of the un-free software that helped us to understand it. What “cloud” means is that servers have ceased to be made of iron. “Cloud” means virtualization of servers has occurred.

So, out here in the dusty edges of the galaxy where we live in dis-empowered clienthood, nothing very much has changed. As you walk inward towards the center of the galaxy, it gets more fuzzy than it used to. We resolve now halo where we used to see actual stars. Servers with switches and buttons you can push and such. Instead, what has happened is that iron no longer represents a single server. Iron is merely a place where servers could be. So “cloud” means servers have gained freedom, freedom to move, freedom to dance, freedom to combine and separate and re-aggregate and do all kinds of tricks. Servers have gained freedom. Clients have gained nothing. Welcome to the cloud.

It’s a minor modification of the recipe for disaster. It improves the operability for systems that control the clients out there who were meant to be peers in a Net made of equal things.

So that’s the architecture of the catastrophe. If you think about it, each step in that architectural revolution: from a network made of peers, to servers that serve the communication with humans, to clients which are programs running on heavy iron, to clients which are the computers that people actually use in a fairly dis-empowered state and servers with a high concentration of power in the Net, to servers as virtual processes running in clouds of iron at the center of an increasingly hot galaxy and the clients are out there in the dusty spiral arms.

All of those decisions architecturally were made without any discussion of the social consequences long-term, part of our general difficulty in talking about the social consequences of technology during the great period of invention of the Internet done by computer scientists who weren’t terribly interested in Sociology, Social Psychology, or, with a few shining exceptions – freedom. So we got an architecture which was very subject to misuse. Indeed, it was in a way begging to be misused and now we are getting the misuse that we set up. Because we have thinned the clients out further and further and further. In fact, we made them mobile. We put them in our pockets and we started strolling around with them.

There are a lot of reasons for making clients dis-empowered and there are even more reasons for dis-empowering the people who own the clients and who might quaintly be thought of the people who ought to control them. If you think for just a moment how many people have an interest in dis-empowering the clients that are the mobile telephones you will see what I mean. There are many overlapping rights owners as they think of themselves each of whom has a stake in dis-empowering a client at the edge of the network to prevent particular hardware from being moved from one network to another. To prevent particular hardware from playing music not bought at the great monopoly of music in the sky. To disable competing video delivery services in new chips I founded myself that won’t run popular video standards, good or bad. There are a lot of business models that are based around mucking with the control over client hardware and software at the edge to deprive the human that has quaintly thought that she purchased it from actually occupying the position that capitalism says owners are always in – that is, of total control.

In fact, what we have as I said a couple of years ago in between appearances here at another NYU function. In fact, what we have are things we call platforms. The word “platform” like the word “cloud” doesn’t inherently mean anything. It’s thrown around a lot in business talk. But, basically what platform means is places you can’t leave. Stuff you’re stuck to. Things that don’t let you off. That’s platforms. And the Net, once it became a hierarchically architected zone with servers in the center and increasingly dis-empowered clients at the edge, becomes the zone of platforms and platform making becomes the order of the day.

Some years ago a very shrewd lawyer who works in the industry said to me “Microsoft was never really a software company. Microsoft was a platform management company”. And I thought Yes, shot through the heart.

So we had a lot of platform managers in a hierarchically organized network and we began to evolve services. “Services” is a complicated word. It’s not meaningless by any means but it’s very tricky to describe it. We use it for a lot of different things. We badly need an analytical taxonomy of “services” as my friend and colleague Philippe Aigrain in Paris pointed out some 2 or 3 years ago. Taxonomies of “services” involve questions of simplicity, complexity, scale, and control.

To take an example, we might define a dichotomy between complex and simple services in which simple services are things that any computer can perform for any other computer if it wants to and complex services are things you can’t do with a computer. You must do with clusters or structures of some computational or administrative complexity. SEARCH is a complex service. Indeed, search is the archetypal complex service. Given the one way nature of links in the Web and other elements in the data architecture we are now living with (that’s another talk, another time) search is not a thing that we can easily distribute. The power in the market of our friends at Google depends entirely on the fact that search is not easily distributed. It is a complex service that must be centrally organized and centrally delivered. It must crawl the web in a unilateral direction, link by link, figuring out where everything is in order to help you find it when you need it. In order to do that, at least so far, we have not evolved good algorithmic and delivery structures for doing it in a decentralized way. So, search becomes an archetypal complex service and it draws onto itself a business model for its monetiztion.

Advertising in the 20th century was a random activity. You threw things out and hoped they worked. Advertising in the 21st century is an exquisitely precise activity. You wait for a guy to want something and then you send him advertisements about what he wants and bingo it works like magic. So of course on the underside of a complex service called search there is a theoretically simple service called advertising which, when unified to a complex service, increases its efficiency by orders of magnitude and the increase of the efficiency of the simple service when combined with the complex one produces an enormous surplus revenue flow which can be used to strengthen search even more.

But that’s the innocent part of the story and we don’t remain in the innocent part of the story for a variety of uses. I won’t be tedious on a Friday night and say it’s because the bourgeoisie is constantly engaged in destructively reinventing and improving its own activities and I won’t be moralistic on a Friday night that you can’t do that and say because sin is in-eradicable and human beings are fallen creatures and greed is one of the sins we cannot avoid committing. I will just say that as a sort of ordinary social process we don’t stop at innocent. We go on, which surely is the thing you should say on a Friday night. And so we went on.

Now, where we went on is really towards the discovery that all of this would be even better if you had all the logs of everything because once you have the logs of everything then every simple service is suddenly a goldmine waiting to happen and we blew it because the architecture of the Net put the logs in the wrong place. They put the logs where innocence would be tempted. They put the logs where the failed state of human beings implies eventually bad trouble and we got it.

The cloud means that we can’t even point in the direction of the server anymore and because we can’t even point in the direction of the server anymore we don’t have extra technical or non-technical means of reliable control over this disaster in slow motion. You can make a rule about logs or data flow or preservation or control or access or disclosure but your laws are human laws and they occupy particular territory and the server is in the cloud and that means the server is always one step ahead of any rule you make or two or three or six or poof! I just realized I’m subject to regulation, I think I’ll move to Oceana now.

Which means that in effect, we lost the ability to use either legal regulation or anything about the physical architecture of the network to interfere with the process of falling away from innocence that was now inevitable in the stage I’m talking about, what we might call late Google stage 1.

It is here, of course, that Mr. Zuckerberg enters.

The human race has susceptibility to harm but Mr. Zuckerberg has attained an unenviable record: he has done more harm to the human race than anybody else his age.

Because he harnessed Friday night. That is, everybody needs to get laid and he turned it into a structure for degenerating the integrity of human personality and he has to a remarkable extent succeeded with a very poor deal. Namely, “I will give you free web hosting and some PHP doodads and you get spying for free all the time”. And it works.

That’s the sad part, it works.

How could that have happened?

There was no architectural reason, really. There was no architectural reason really. Facebook is the Web with “I keep all the logs, how do you feel about that?” It’s a terrarium for what it feels like to live in a panopticon built out of web parts.

And it shouldn’t be allowed. It comes to that. It shouldn’t be allowed. That’s a very poor way to deliver those services. They are grossly overpriced at “spying all the time”. They are not technically innovative. They depend upon an architecture subject to misuse and the business model that supports them is misuse. There isn’t any other business model for them. This is bad.

I’m not suggesting it should be illegal. It should be obsolete. We’re technologists, we should fix it.

I’m glad I’m with you so far. When I come to how we should fix it later I hope you will still be with me because then we could get it done.

But let’s say, for now, that that’s a really good example of where we went wrong and what happened to us because. It’s trickier with gmail because of that magical untouched by human hands-iness. When I say to my students, “why do you let people read your email”, they say “but nobody is reading my email, no human being ever touched it. That would freak me out, I’d be creeped out if guys at Google were reading my email. But that’s not happening so I don’t have a problem.”

Now, this they cannot say about Facebook. Indeed, they know way too much about Facebook if they let themselves really know it. You have read the stuff and you know. Facebook workers know who’s about to have a love affair before the people do because they can see X obsessively checking the Facebook page of Y. There’s some very nice research done a couple of years ago at an MIT I shouldn’t name by students I’m not going to describe because they were a little denting to the Facebook terms of service in the course of their research. They were just scraping but the purpose of their scraping was the demonstrate that you could find closeted homosexuals on Facebook.

They don’t say anything about their sexual orientation. Their friends are out, their interests are the interests of their friends who are out. Their photos are tagged with their friends who are out and they’re out except they’re not out. They’re just out in Facebook if anybody looks, which is not what they had in mind surely and not what we had in mind for them, surely. In fact, the degree of potential information inequality and disruption and difficulty that arises from a misunderstanding, a heuristic error, in the minds of human beings about what is and what’s not discoverable about them is not our biggest privacy problem.

My students, and I suspect many of the students of teachers in this room too, show constantly in our dialog the difficulty. They still think of privacy as “the one secret I don’t want revealed” and that’s not the problem. Their problem is all the stuff that’s the cruft, the data dandruff of life, that they don’t think of as secret in any way but which aggregates to stuff that they don’t want anybody to know. Which aggregates, in fact, not just to stuff they don’t want people to know but to predictive models about them that they would be very creeped out could exist at all. The simplicity with which you can de-anonymize theoretically anonymized data, the ease with which, for multiple sources available to you through third and fourth party transactions, information you can assemble, data maps of people’s lives. The ease with which you begin constraining, with the few things you know about people, the data available to you, you can quickly infer immense amounts more.

My friend and colleague Bradly Kuhn who works at the Software Freedom Law Center is one of those archaic human beings who believes that a social security number is a private thing. And he goes to great lengths to make sure that his Social Security is not disclosed which is his right under our law, oddly enough. Though, try and get health insurance or get a safe deposit box, or in fact, operate the business at all. We bend over backwards sometimes in the operation of our business because Bradly’s Social Security number is a secret. I said to him one day “You know, it’s over now because Google knows your Social Security number”. He said “No they don’t, I never told it to anybody”. I said, “Yeah but they know the Social Security number of everybody else born in Baltimore that year. Yours is the other one”.

And as you know, that’s true. The data that we infer is the data in the holes between the data we already know if we know enough things.

So, where we live has become a place in which it would be very unwise to say about anything that it isn’t known. If you are pretty widely known in the Net and all of us for one reason or another are pretty widely known in the Net. We want to live there. It is our neighborhood. We just don’t want to live with a video camera on every tree and a mic on every bush and the data miner beneath our feet everywhere we walk and the NET is like that now. I’m not objecting to the presence of AOL newbies in Usenet news. This is not an aesthetic judgment from 1995 about how the neighborhood is now full of people who don’t share our ethnocentric techno geekery. I’m not lamenting progress of a sort of democratizing kind. On the contrary, I’m lamenting progress of a totalizing kind. I’m lamenting progress hostile to human freedom. We all know that it’s hostile to human freedom. We all understand it’s despotic possibilities because the distopias of which it is fertile were the stuff of the science fiction that we read when we were children. The Cold War was fertile in the fantastic invention of where we live now and it’s hard for us to accept that but it’s true. Fortunately, of course, it’s not owned by the government. Well, it is. It’s fortunate. It’s true. It’s fortunate that it’s owned by people that you can bribe to get the thing no matter who you are. If you’re the government you have easy ways of doing it. You fill out a subpoena blank and you mail it.

I spent two hours yesterday with a law school class explaining in detail why the 4th Amendment doesn’t exist anymore because that’s Thursday night and who would do that on a Friday night? But the 4th Amendment doesn’t exist anymore. I’ll put the audio on the Net and the FBI and you can listen to it anytime you want.

We have to fess up if we’re the people who care about freedom, it’s late in the game and we’re behind. We did a lot of good stuff and we have a lot of tools lying around that we built over the last 25 years. I helped people build those tools. I helped people keep those tools safe, I helped people prevent the monopoly from putting all those tools in its bag and walking off with them and I’m glad the tools are around but we do have to admit that we have not used them to protect freedom because freedom is decaying and that’s what David meant in his very kind introduction.

In fact, people who are investing in the new enterprises of unfreedom are also the people you will hear if you hang out in Silicon Valley these days that open source has become irrelevant. What’s their logic? Their logic is that software as a service is becoming the way of the world. Since nobody ever gets any software anymore, the licenses that say “if you give people software you have to give them freedom” don’t matter because you’re not giving anybody software. You’re only giving them services.

Well, that’s right. Open source doesn’t matter anymore. Free software matters a lot because of course, free software is open source software with freedom. Stallman was right. It’s the freedom that matters. The rest of it is just source code. Freedom still matters and what we need to do is to make free software matter to the problem that we have which is unfree services delivered in unfree ways really beginning to deteriorate the structure of human freedom.

Like a lot of unfreedom, the real underlying social process that forces this unfreedom along is nothing more than perceived convenience.

All sorts of freedom goes over perceived convenience. You know this. You’ve stopped paying for things with cash. You use a card that you can wave at an RFID reader.

Convenience is said to dictate that you need free web hosting and PHP doodads in return for spying all the time because web servers are so terrible to run. Who could run a web server of his own and keep the logs? It would be brutal. Well, it would if it were IIS. It was self-fulfilling, it was intended to be. It was designed to say “you’re a client, I’m a server. I invented Windows 7, It was my idea. I’ll keep the logs thank you very much.” That was the industry. We built another industry. It’s in here. But it’s not in. Well, yeah it is kind of in here. So where isn’t it? Well it’s not in the personal web server I don’t have that would prevent me from falling…well, why don’t we do something about that.

What do we need? We need a really good webserver you can put in your pocket and plug in any place. In other words, it shouldn’t be any larger than the charger for your cell phone and you should be able to plug it in to any power jack in the world and any wire near it or sync it up to any wifi router that happens to be in its neighborhood. It should have a couple of USB ports that attach it to things. It should know how to bring itself up. It should know how to start its web server, how to collect all your stuff out of the social networking places where you’ve got it. It should know how to send an encrypted backup of everything to your friends’ servers. It should know how to microblog. It should know how to make some noise that’s like tweet but not going to infringe anybody’s trademark. In other words, it should know how to be you …oh excuse me I need to use a dangerous word – avatar – in a free net that works for you and keeps the logs. You can always tell what’s happening in your server and if anybody wants to know what’s happening in your server they can get a search warrant.

And if you feel like moving your server to Oceana or Sealand or New Zealand or the North Pole, well buy a plane ticket and put it in your pocket. Take it there. Leave it behind. Now there’s a little more we need to do. It’s all trivial. We need some dynamic DNS and all stuff we’ve already invented. It’s all there, nobody needs anything special. Do we have the server you can put in your pocket? Indeed, we do. Off the shelf hardware now. Beautiful little wall warts made with ARM chips. Exactly what I specked for you. Plug them in, wire them up. How’s the software stack in there? Gee, I don’t know it’s any software stack you want to put in there.

In fact, they’ll send it to you with somebody’s top of the charts current distro in it, you just have to name which one you want. Which one do you want? Well you ought to want the Debian Gnu Linux social networking stack delivered to you free, free as in freedom I mean. Which does all the things I name – brings itself up, runs it’s little Apache or lighttpd or it’s tiny httpd, does all the things we need it to do – syncs up, gets your social network data from the places, slurps it down, does your backup searches, finds your friends, registers your dynamic DNS. All is trivial. All this is stuff we’ve got. We need to put this together. I’m not talking about a thing that’s hard for us. We need to make a free software distribution device. How many of those do we do?

We need to give a bunch to all our friends and we need to say, here fool around with this and make it better. We need to do the one thing we are really really really good at because all the rest of it is done, in the bag, cheap ready. Those wall wart servers are $99 now going to $79 when they’re five million of them they’ll be $29.99.

Then we go to people and we say $29.99 once for a lifetime, great social networking, updates automatically, software so strong you couldn’t knock it over it you kicked it, used in hundreds of millions of servers all over the planet doing a wonderful job. You know what? You get “no spying” for free. They want to know what’s going on in there? Let them get a search warrant for your home, your castle, the place where the 4th Amendment still sort of exists every other Tuesday or Thursday when the Supreme Court isn’t in session. We can do that. We can do that. That requires us to do only the stuff we’re really really good at. The rest of it we get for free. Mr. Zuckerberg? Not so much.

Because of course, when there is a competitor to “all spying all the time whether you like it or not”, the competition is going to do real well. Don’t expect Google to be the competitor. That’s our platform. What we need is to make a thing that’s so greasy there will never be a social network platform again. Can we do it? Yeah, absolutely. In fact, if you don’t have a date on Friday night, let’s just have a hackfest and get it done. It’s well within our reach.

We’re going to do it before the Facebook IPO? Or are we going to wait till after? Really? Honestly? Seriously. The problem that the law has very often in the world where we live and practice and work, the problem that the law has very often, the problem that technology can solve. And the problem that technology can solve is the place where we go to the law. That’s the free software movement. There’s software hacking over here and there’s legal hacking over there and you put them both together and the whole is bigger than the sum of the parts. So, it’s not like we have to live in the catastrophe. We don’t have to live in the catastrophe. It’s not like what we have to do to begin to reverse the catastrophe is hard for us. We need to re-architect services in the Net. We need to re-distribute services back towards the edge. We need to de-virtualize the servers where your life is stored and we need to restore some autonomy to you as the owner of the server.

The measures for taking those steps are technical. As usual, the box builders are ahead of us. The hardware isn’t the constraint. As usual, nowadays, the software isn’t really that deep a constraint either because we’ve made so much wonderful software which is in fact being used by all the guys on the bad architecture. They don’t want to do without our stuff. The bad architecture is enabled, powered by us. The re-architecture is too. And we have our usual magic benefit. If we had one copy of what I’m talking about, we’d have all the copies we need. We have no manufacturing or transport or logistics constraint. If we do the job, it’s done. We scale.

This is technical challenge for social reason. It’s a frontier for technical people to explore. There is enormous social pay-off for exploring it.

The payoff is plain because the harm being ameliorated is current and people you know are suffering from it. Everything we know about why we make free software says that’s when we come into our own. It’s a technical challenge incrementally attainable by extension from where we already are that makes the lives of the people around us and whom we care about immediately better. I have never in 25 years of doing this work, I have never seen us fail to rise to a challenge that could be defined in those terms. So I don’t think we’re going to fail this one either.

Mr. Zuckerberg richly deserves bankruptcy.

Let’s give it to him. For Free.

And I promise, and you should promise too, not to spy on the bankruptcy proceeding. It’s not any of our business. It’s private.

This is actually a story potentially happy. It is a story potentially happy and if we do it then we will have quelled one more rumor about the irrelevance of us and everybody in the Valley will have to go find another buzz word and all the guys who think that Sandhill Road is going to rise into new power and glory by spying on everybody and monetizing it will have to find another line of work too, all of which is purely on the side of the angels. Purely on the side of the angels.

We will not be rid of all our problems by any means, but just moving the logs from them to you is the single biggest step that we can take in resolving a whole range of social problems that I feel badly about what remains of my American constitution and that I would feel badly about if I were watching the failure of European data protection law from inside instead of outside and that I would feel kind of hopeful about if I were, oh say, a friend of mine in China. Because you know of course we really ought to put a VPN in that wall wart.

And probably we ought to put a Tor router in there.

And of course, we’ve got bittorrent, and by the time you get done with all of that, we have a freedom box. We have a box that not merely climbs us out of the hole we’re in, we have a box that actually puts a ladder up for people who are deeper in the hole than we are, which is another thing we love to do.

I do believe the US State Department will go slanging away at the Chinese communist party for a year or two about internet freedom and I believe the Chinese communist party is going to go slanging back and what they’re going to say is “You think you’ve got real good privacy and autonomy in the internet voyear in your neighborhood?” And every time they do that now as they have been doing that in the last 2 weeks, I would say ouch if I was Hilary Clinton and I knew anything about it because we don’t. Because we don’t. It’s true. We have a capitalist kind and they have a centralist vanguard of the party sort of Marxist kind or maybe Marxist or maybe just totalitarian kind but we’re not going to win the freedom of the net discussion carrying Facebook on our backs. We’re not.

But you screw those wall wart servers around pretty thickly in American society and start taking back the logs and you want to know who I talked to on a Friday night? Get a search warrant and stop reading my email. By the way there’s my GPG key in there and now we really are encrypting for a change and so on and so on and so on and it begins to look like something we might really want to go on a national crusade about. We really are making freedom here for other people too. For people who live in places where the web don’t work.

So there’s not a challenge we don’t want to rise to. It’s one we want to rise to plenty. In fact, we’re in a happy state in which all the benefits we can get are way bigger than the technical intricacy of doing what needs to be done, which isn’t much.

That’s where we came from. We came from our technology was more free than we understood and we gave away a bunch of the freedom before we really knew it was gone. We came from unfree software had bad social consequences further down the road than even the freedom agitators knew. We came from unfreedom’s metaphors tend to produce bad technology.

In other words, we came from the stuff that our movement was designed to confront from the beginning but we came from there. And we’re still living with the consequences of we didn’t do it quite right the first time, though we caught up thanks to Richard Stallman and moving on.

Where we live now is no place we’re going to have to see our grandchildren live. Where we live now is no place we would like to conduct guided tours of. I used to say to my students how many video cameras are there between where you live and the Law school? Count them. I now say to my students how many video cameras are there between the front door to the law school and this classroom? Count them.

I now say to my students “can you find a place where there are no video cameras?” Now, what happened in that process was that we created immense cognitive auxiliaries for the state – enormous engines of listening. You know how it is if you live in an American university thanks to the movie and music companies which keep reminding you of living in the midst of an enormous surveillance network. We’re surrounded by stuff listening to and watching us. We’re surrounded by mine-able data.

Not all of that’s going to go away because we took Facebook and split it up and carried away our little shards of it. It’s not going to go away cause we won’t take free webhosting with spying inside anymore. We’ll have other work to do. And some of that work is lawyers work. I will admit that. Some of that work is law drafting and litigating and making trouble and doing lawyer stuff. That’s fine. I’m ready.

My friends an I will do the lawyers part. It would be way simpler to do the lawyer’s work if we were living in a society which had come to understand it’s privacy better. It would be way simpler to do the lawyer’s work if young people realize that when they grow up and start voting or start voting now that they’re grown up, this is an issue. That they need to get the rest of it done the way we fixed the big stuff when we were kids. We’ll have a much easier time with the enormous confusions of international interlocking of regimes when we have deteriorated the immense force of American capitalism forcing us to be less free and more surveilled for other people’s profit all the time. It isn’t that this gets all the problems solved but the easy work is very rich and rewarding right now.

The problems are really bad. Getting the easy ones out will improve the politics for solving the hard ones and it’s right up our alley. The solution is made of our parts. We’ve got to do it. That’s my message. It’s Friday night. Some people don’t want to go right back to coding I’m sure. We could put it off until Tuesday but how long do you really want to wait? You know everyday that goes by there’s more data we’ll never get back. Everyday that goes by there’s more data inferences we can’t undo. Everyday that goes by we pile up more stuff in the hands of the people who got too much. So it’s not like we should say “one of these days I’ll get around to that”. It’s not like we should say “I think I’d rather sort of spend my time browsing news about iPad”.

It’s way more urgent than that.

It’s that we haven’t given ourselves the direction in which to go so let’s give ourselves the direction in which to go. The direction in which to go is freedom using free software to make social justice.

But, you know this. That’s the problem with talking on a Friday night. You talk for an hour and all you tell people is what they know already.

So thanks a lot. I’m happy to take your questions.
How Phone-Powered Mesh Networks Could Help in Egypt
by Kevin C. Tofel / Feb. 1, 2011

Mobile broadband is arguably the most empowering technology that’s currently driving the cloud, smartphone and app markets, but it’s simply not feasible to cover every square inch of the planet with a fast wireless connection. So how does one communicate with others in an area without any cellular coverage, or when governments request a shut down of network services? The answer may lie within phones that create a direct relay system to transmit voice or data. This approach is called a mesh network, which enables a device to both receive and retransmit signals, much like a router does in home wireless network. The below video from ABC News Adelaide shows the mesh network in action on basic Android handsets, with researchers communicating to each other by voice, even though there are no cellular towers in range.

You can easily tell in the video spot that the voice quality is sub-par and therefore, best suited for emergency communication in remote areas outside of traditional network coverage. But the peer-to-peer voice technology could improve as radios and software continue to evolve. The scenario reminds me of one of my first Skype calls back in 2004 — ironically, to someone in Australia — the call was filled with delays and echos, but still usable. Just use Skype now to see how the technology has been refined and improved. While carriers control much of the handset experience and have little to no incentive to trying to mature a communications technology that bypasses their networks, I’d like to see such mesh network research efforts continue. Think of the current situation in Egypt, where protests, tweets and phone calls have put the region front and center on the world stage and have caused the Egyptian government to effectively shut down Internet access in the country.

That’s just one step short of closing down cellular voice communications. In an extreme case such as that, phones that can enable direct communication through a handset relay system would enable families, emergency crews and others to avoid a total communications black-out. Data too could be routed through such mesh networks, ensuring that tweets and web services continue to flow. And while many voice and data networks are still separate today, the rise of 4G networks will eventually bring voice traffic over the web too, so any future Internet shut-downs could impact voice calls. Will mesh or peer-to-peer technologies completely replace traditional networks for voice, or data, for that matter? That’s highly unlikely due to many corporate, legal and technological challenges. But should such relay services and software solutions continue to be looked at as backup plans? I’d say yes, and I’m willing to bet a fair number of people in Egypt right now would agree.

Project Serval aims to enable communication anywhere, any time, without infrastructure, cell towers, or mobile carriers.
Android Software Connects Calls Without Mobile Carriers
by Thomas Claburn / February 1, 2011

A university researcher in Australia has developed software that allows Android phones to make voice calls without the help of a mobile carrier. Paul Gardner-Stephen, a research fellow in the School of Computer Science, Engineering and Mathematics at Flinders University in Adelaide, Australia, has devised a technology that relays calls directly from one phone to another. The software will soon be available on the Serval Project Web site. It has two components: one creates a temporary, self-organizing, self-powered mobile network using phone towers dropped by air (as might be done in a crisis situation); the second supports a permanent mesh network that allows Wi-Fi enabled mobile phones, and eventually phones that connect via unlicensed frequencies (called Batphones), to communicate directly. “Phones running our software relay calls between themselves,” said Gardner-Stephen in a university news release. “If even just one of those can see a cell tower, then calls can be with any of the phones, thus sustaining communications in affected areas. A balloon is not necessary; a phone running our software at any vantage point can suffice.”

Gardner-Stephen cites the recent flooding in parts of Australia, which disabled cell towers, as a use case for the technology. The ongoing communications blackout in Egypt represents another such scenario. Mesh networks are not a new concept, as can be seen from the Mesh Potato. Such projects seem to share a goal of providing phone service to under-served or poor communities. Gardner-Stephen says that any telephone carrier or handset maker can incorporate the Project Serval software and that the Project Serval team will be happy to help make that happen. The promise of the Serval Project may sound tempting to those who’d rather not pay hefty smartphone bills every month — “use your existing mobile phone number wherever you go, and never pay roaming charges again” — but it remains to be seen how keen mobile carriers will be to get paid less for phone calls or nothing at all. Add to that the difficulty of monitoring phone-to-phone communication, particularly if encryption is added, and it’s likely that control-oriented governments will look for ways to limit this kind of technology in the name of combating terrorism.

Charities and NGOs express interest in mobile mesh networking
Mobile communication without traditional infrastructure
by James Hutchinson / 29 January 11

A research project aimed at allowing mobile phones to communicate without traditional infrastructure has attracted phone manufactures and not-for-profits looking to leverage the technology. Paul Gardner-Stephen, who co-founded the Serval project, first demonstrated the mesh network technology while experimenting with the use of Wi-Fi transmitters on phones to carry VoIP conversations. The makeshift capability is capable of transmitting a few hundred metres, but could conceivably harness other phones and inexpensive Wi-Fi transmitters in the area to provide more coverage, even if hundreds of kilometres away from a mobile phone tower. “We are actually carrying voice over that but in a way that doesn’t need to go back to a central repository anywhere,” Flinders University researcher, Paul Gardner-Stephen, told ABC Local Radio program, AM, at the time.

Natural disasters
Initial expectations were that the experimental mobile technology would be used in cases of a natural disaster, allowing rescue workers to communicate with each other and to head office, either by utilising each others’ mobile phones as transmitters themselves or by deploying portable Wi-Fi transmitters by plane. Presenting at 2011 this week, Gardner-Stephen said community response had already surpassed expectations, with the Australian Red Cross voicing enthusiasm at the possibilities. “They said during the Victorian bushfires, and I was flabbergasted when I heard this, they lost contact with crews for three days in the midst of the bushfires,” he said. “That’s one of the things that this technology can work to.” Gardner-Stephen said one phone manufacturer had also registered interest, though continuing talks with carriers around improving existing mobile infrastructure in rural areas were non-productive. The Serval project has garnered $1000 in funding from The Awesome Foundation while Gardner-Stephen gained a three year fellowship with Flinders University, allowing him to work on the project full-time. The research project, which now counts seven people among its members, has continued to work on improving the technology, with plans to move away from data-heavy SIP voice protocols to an open source standard developed in-house.

The software is soon expected to work across all Android devices as well as iOS, Windows Mobile and other platforms, though the project is also looking to develop ‘Batphones’ that work over unlicensed frequencies rather than Wi-Fi. Gardner-Stephen used his presentation at to provide the first public demonstration of the newly implemented PSTN gateway, allowing outbound calls from enabled devices to standard landline and mobile phones. Demonstrated on a “rooted” HTC Dream, or Google G1, the device called a mobile phone on a standard 3G network over Wi-Fi, while in airplane mode. A similar demonstration between two enabled devices operating over the mesh network wasn’t as successful. Later during the day, Gardner-Stephen performed another demonstration at the conference, launching a hot air balloon with Wi-Fi transmitter attached to provide greater coverage between mesh devices.

No threat to telcos
Serval’s attempt at creating a “best effort network” in areas without mobile coverage was not a threat to the existing telecommunications landscape, Gardner-Stephen said. “In actual fact, telcos are the ideal people to provide the interconnect between the local meshes,” he said. “Certainly for the first telco to partner with us, there’s actually some enormous dividends to be had. “We’re excited that this technology is not going to cost anyone a cent, there’s no reason why it can’t be put in every phone that’s physically capable of supporting it and that it can save lives, that it can save stress and duress in disasters. That it can connect the last two billion, and actually the last five billion, to the internet, because it’s all over IP.” Though Gardner-Stephen couldn’t confirm plans on IPv6 compatibility for the software, he said each of the phones connected to the mesh network would effectively share a single IPv4 address with a unique subscriber identifier used to differentiate between devices. David Rowe, another presenter at the 2011 conference, talked about the the successes of a similar mesh-like telephone technology Village Telco in the East Timorese capital of Dili.


Computer hobbyists and researchers take note: two U.S. scientists have created a step-by-step guide on how to build a supercomputer using multiple PlayStation 3 video-game consoles. The instructional guide, posted this week online at, allows users with some programming knowledge to install a version of the open-source operating system Linux on the video consoles and connect a number of consoles into a computing cluster or grid. The two researchers say the guide could provide scientists with another, cheaper alternative to renting time on supercomputers to run their simulations.

University of Massachusetts Dartmouth physics professor Gaurav Khanna first built the cluster a year ago to run his simulations estimating the gravitational waves produced when two black holes merged. Frustrated with the cost of renting time on supercomputers, which he said can cost as much as $5,000 to run a 5,000-hour simulation, Khanna decided to set up his own computer cluster using PS3s, which had both a powerful processor developed by Sony, IBM and Toshiba, but also an open platform that allows different system software to run on it. PlayStation 3 systems retail for about $400 Cdn. On the how-to-guide Khanna says the eight-console cluster is roughly comparable in speed to a 200 node IBM Blue Gene supercomputer. Khanna says his research now runs using a cluster of 16 PS3s. The fastest supercomputer in the world, IBM’s Roadrunner supercomputer at Los Alamos National Laboratory, has 3,250 nodes and is capable of 1.105 petaflops, or 1.105 quadrillion floating point operations per second, about 100,000 times faster than a home computer.

Massachusetts Dartmouth computer scientist Chris Poulin, who co-wrote the instructional manual with Khanna, wouldn’t reveal the number of flops the system can achieve, but said anecdotally the cluster has allowed him to run simulations in hours that used to take days on a powerful server computer. Khanna’s not the first researcher to use PS3s to simulate the effects of a supercomputer. The University of Stanford’s Folding at Home project allows people to help with research into how proteins self-assemble — or fold — by downloading software onto their home PS3s, creating a virtual supercomputer. Their research is currently targeting proteins relevant to diseases such as Alzheimer’s and Huntington’s disease. But the guide posted by Khanna and Poulin is the first that might allow someone to set up a supercomputer in their own home.

Poulin said there are two major practical issues, however, that might limit the practicality of a PS3 cluster supercomputer. The first issue is power. He said the video-game consoles use about 200 to 300 watts per unit, so finding a room that could hook up eight of the consoles might be an issue for hobbyists, he says. “I think if you put four or more than four of the systems on one plug you’d probably blow a fuse,” Poulin told CBC News. The second issue is memory. The console has only 256 MB of RAM, far less than most personal computers available now. Poulin said that while the low memory wouldn’t be a problem for straightforward computations, running multiple simulations or programs could tax the system. As a result, simulations running on the cluster would have to be tailored to consider the cluster’s memory limitations. Poulin said he hopes the project will help open doors to more partnerships between industry and universities that will lead to better access to supercomputing power. “That’s ultimately the goal here,” he said. “We want to make things easier, no matter what kind of supercomputer you are using.”

Gaurav Khanna
email : gkhanna [at] umassd [dot] edu

Lior Burko
email : burko [at] uah [dot] edu

This cluster of 336 PlayStation 3 video game consoles is the beginning of a cluster of more than 2,000 consoles the Air Force is purchasing to create a supercomputer called 500 TeraFLOPS Heterogeneous Cluster, which will be housed at the Air Force Research Laboratory’s Affiliated Resource Center in Rome, N.Y.

Air Force to link 2,000 PS3s to make a cheaper supercomputer
by Warren Peace / Stars and Stripes / January 28, 2010

Once thought to be just a part of home entertainment systems, Sony’s PlayStation 3 is proving itself to be more than just an online death-match machine. The console’s price-to-performance ratio inspired one Air Force research team to place an order for 1,700 of them to go with the 336 they already have. The brains behind the Air Force Research Laboratory in Rome, N.Y., are clustering the consoles, along with some off-the-shelf graphic processing units, to create a supercomputer nearly 100,000 times faster than high-end computer processors sold today. The research group was awarded a $2 million grant for the PlayStation 3 cluster. Key to the whole idea is the console’s cell processor, which was designed to easily work in concert with other cell processors to combine processing power and has been critically acclaimed for its number crunching ability.

This lets the researchers leverage power toward running such applications as Back Projection Synthetic Aperture Radar Imager formation, high definition video image processing, and Neuromorphic Computing, which mimics human nervous systems. “With Neuromorphic Computing, as an example, we will broadcast an image to all PS3s and ask if it matches an image it has in its hard drive,” said Dr. Richard Linderman, the senior scientist for Advanced Computing Architectures at the laboratory. Mimicking humans will help the machine recognize images for target recognition, said Mark Barnell, the high performance computing director for the laboratory’s information directorate. “Humans can routinely do these things, but a computer struggles to do it,” Barnell said. “In a general sense, we are interested in making it autonomous.” He added, however “this is not the Holy Grail of supercomputers.”

Because of the way the consoles connect online or to each other is relatively slow compared to regular supercomputing setups, the group is limited in what type of programs can be efficiently run on the PS3 supergroup they call the 500 TeraFLOPS Heterogeneous Cluster. Linderman said the entire system is using mostly off-the-shelf components, and will be a relatively cheap, green machine. Keeping with the off-the-shelf mentality, the Air Force is using metal shelves found at most department stores to house the PS3 cluster. They are also using Linux, which is a free, open source operating system.

The system will use 300 to 320 kilowatts at full bore and about 10 percent to 30 percent of that in standby, when most supercomputers are using 5 megawatts, Linderman said. However, much of the time the cluster will only be running the nodes it needs and it will be turned off when not in use. “Supercomputers used to be unique with unique processors,” Linderman said. “By taking advantage of a growing market, the gaming market, we are bringing the price performance to just $2 to $3 per gigaFLOPS.” As a point of reference, 10 years ago the University of Kentucky claimed the record of the first unit capable of 1 billion floating point operations per second or gigaFLOPS, to cost less than $1,000. The cost per gigaFLOPS was $640.

They have been able to take advantage of about 60 percent of the PlayStations’ performance ability, Linderman said. Once complete, they are expecting to have a unit capable of 500 teraFLOPS or 500 trillion operations per second. The Air Force plans to have the 1,700 they recently ordered fully integrated into the system by June as part of the Department of Defense’s High Performance Computer Modernization Program. Being part of the DOD program opens the use of the computer to other government agencies and universities that are a part of the program. As for now, the system will be handling unclassified data, but that may change in the future, Linderman said.

This is not the first time PlayStation 3s have been networked together for their processing ability. The Folding@home project allows gamers to volunteer their PS3s and Internet connections while the owners are not using them. The project earned a Guinness World Record for achieving the first petaFLOPS or quadrillion operations per second by a distributed computing network in 2007. “I think is just another step in a journey that has been going on for a while,” Linderman said of using consumer components for supercomputers. “But, this will be far and away the largest interactive high-performance computer.”


Astrophysicist Replaces Supercomputer with Eight PlayStation 3s
BY Bryan Gardiner  /  10.17.07

Gaurav Khanna’s eight PlayStation 3s aren’t running Heavenly Sword — they’re using Linux plus custom code to solve complex computations. Suffering from its exorbitant price point and a dearth of titles, Sony’s PlayStation 3 isn’t exactly the most popular gaming platform on the block. But while the console flounders in the commercial space, the PS3 may be finding a new calling in the realm of science and research. Right now, a cluster of eight interlinked PS3s is busy solving a celestial mystery involving gravitational waves and what happens when a super-massive black hole, about a million times the mass of our own sun, swallows up a star.

As the architect of this research, Dr. Gaurav Khanna is employing his so-called “gravity grid” of PS3s to help measure these theoretical gravity waves — ripples in space-time that travel at the speed of light — that Einstein’s Theory of Relativity predicted would emerge when such an event takes place. It turns out that the PS3 is ideal for doing precisely the kind of heavy computational lifting Khanna requires for his project, and the fact that it’s a relatively open platform makes programming scientific applications feasible. “The interest in the PS3 really was for two main reasons,” explains Khanna, an assistant professor at the University of Massachusetts, Dartmouth who specializes in computational astrophysics. “One of those is that Sony did this remarkable thing of making the PS3 an open platform, so you can in fact run Linux on it and it doesn’t control what you do.” He also says that the console’s Cell processor, co-developed by Sony, IBM and Toshiba, can deliver massive amounts of power, comparable even to that of a supercomputer — if you know how to optimize code and have a few extra consoles lying around that you can string together. “The PS3/Linux combination offers a very attractive cost-performance solution whether the PS3s are distributed (like Sony and Stanford’s Folding@home initiative) or clustered together (like Khanna’s), says Sony’s senior development manager of research and development, Noam Rimon.

According to Rimon, the Cell processor was designed as a parallel processing device, so he’s not all that surprised the research community has embraced it. “It has a general purpose processor, as well as eight additional processing cores, each of which has two processing pipelines and can process multiple numbers, all at the same time,” Rimon says. This is precisely what Khanna needed. Prior to obtaining his PS3s, Khanna relied on grants from the National Science Foundation (NSF) to use various supercomputing sites spread across the United States “Typically I’d use a couple hundred processors — going up to 500 — to do these same types of things.” However, each of those supercomputer runs cost Khanna as much as $5,000 in grant money. Eight 60 GB PS3s would cost just $3,200, by contrast, but Khanna figured he would have a hard time convincing the NSF to give him a grant to buy game consoles, even if the overall price tag was lower. So after tweaking his code this past summer so that it could take advantage of the Cell’s unique architecture, Khanna set about petitioning Sony for some help in the form of free PS3s. “Once I was able to get to the point that I had this kind of performance from a single PS3, I think that’s when Sony started paying attention,” Khanna says of his optimized code.

Khanna says that his gravity grid has been up and running for a little over a month now and that, crudely speaking, his eight consoles are equal to about 200 of the supercomputing nodes he used to rely on. “Basically, it’s almost like a replacement,” he says. “I don’t have to use that supercomputer anymore, which is a good thing. For the same amount of money — well, I didn’t pay for it, but even if you look into the amount of funding that would go into buying something like eight PS3s — for the same amount of money I can do these runs indefinitely.” The point of the simulations Khanna and his team at UMass are running on the cluster is to see if gravitational waves, which have been postulated for almost 100 years but have never been observed, are strong enough that we could actually observe them one day. Indeed, with NASA and other agencies building some very big gravitational wave observatories with the sensitivity to be able to detect these waves, Khanna’s sees his work as complementary to such endeavors. Khanna expects to publish the results of his research in the next few months. So while PS3 owners continue to wait for a fuller range of PS3 titles and low prices, at least they’ll have some reading material to pass the time.

Scientists Create Supercomputer from Sony Playstations
BY John Markoff  /  27 May 2003

NY Times/CNET News — As perhaps the clearest evidence yet of the power of sophisticated but inexpensive game consoles, the National Center for Supercomputing Applications at the University of Illinois at Urbana-Champaign has assembled a supercomputer from an army of Sony PlayStation 2 devices. The resulting system, with components purchased at retail prices, cost a little more than $50,000. Researchers at the supercomputing center believe the system may be capable of a half trillion operations a second, well within the definition of supercomputer, although it may not rank among the world’s 500 fastest supercomputers.

Perhaps the most striking aspect of the project, which uses the open-source Linux operating system, is that the only hardware engineering involved was placing 70 of the individual game machines in a rack and plugging them together with a high-speed Hewlett-Packard network switch. The center’s scientists bought 100 machines but are holding 30 in reserve, possibly for high-resolution display application. “It took a lot of time because you have to cut all of these things out of the plastic packaging,” said Craig Steffen, a senior research scientist at the center, who is one of four scientists working part time on the project. The scientists are taking advantage of a standard component of the PS2 that was originally intended to move and transform pixels rapidly on a television screen to produce lifelike graphics.

That chip is not the PlayStation 2’s MIPS microprocessor, but rather a graphics co-processor known as the Emotion Engine. That custom-designed silicon chip is capable of producing up to 6.5 billion mathematical operations a second. The impressive performance of the game machine, which has been on the market for a few years, underscores a radical shift that has taken place in the computing world since the end of the Cold War in the late 1980s, according to the researchers. While the most advanced computing technologies have historically been developed first for large corporate users and military contractors, increasingly the fastest computers are being developed for the consumer market and for products meant to be placed under Christmas trees. “If you look at the economics of game platforms and the power of computing on toys, this is a long-term market trend and computing trend,” said Dan Reed, the supercomputing center’s director. “The economics are just amazing. This is going to drive the next big wave in high-performance computing.”

The scientists have their eyes on a variety of consumer hardware, he said. For example Nvidia, the maker of graphics cards for PCs, is now selling a high-performance graphics card capable of executing 51 billion mathematical operations per second. The pace of the consumer computing world is moving so quickly that the researchers are building the PlayStation 2-based supercomputer as an experiment to see how quickly they can take advantage of off-the-shelf, low-cost technologies. “I think we’d like to be able to transfer a lot of our experience to the next generation,” he said. Despite the computing promise of game consoles that sell for less than $200, the researchers acknowledged that the experiment was likely to be most useful for a group of relatively narrow scientific problems. They added that while the system was already doing scientific calculations, they cannot be certain about its ultimate computing potential until they write more carefully tuned software routines that can move data in and out of the custom processor quickly.

The limited memory of the Sony game console–32MB of memory–would also restrict the practical applications of the supercomputer, they said. But they noted that the computer was already running useful calculations on quantum chromodynamics, or QCD, simulations. QCD is a theory concerning the so-called strong interactions that bind elementary particles like quarks and gluons together to form hadrons, the constituents of nuclear matter. The ability to lower the cost of QCD simulation in itself would be significant, the researchers said, because such problems are the single largest consumer of computing resources on supercomputers at the Department of Energy and the National Energy Research Scientific Computing Center.

Still, several supercomputer experts said that the memory and computing bandwidth limitations of the PlayStation would prohibit broader applications of the machine. Gordon Bell, a Microsoft computer scientist and a veteran of the supercomputer world, said the PlayStation supercomputer might find its best application as a computer for the large digital display walls that are used by the Defense Department. Bell awards annual computing prizes that include a category for the best price/performance in high performance computing. “They should enter my contest,” he said. The supercomputing center’s scientists said they had chosen the PlayStation 2 because Sony sells a special Linux module that includes a high-speed network connection and a disk drive. By contrast, it is almost impossible for researchers to install the Linux system on Microsoft’s Xbox game console. Using a network of machines is not a new concept in the supercomputing world. Linux, which plays a major role in that world, has been used to assemble high-performance parallel computers built largely out of commodity hardware components. These machines are generally called Beowulf clusters.

PS3 supercomputer illustrates innovative IT cost savings
BY Bill Detwiler  /  March 4th, 2009

Back in 2007, Dr. Frank Mueller, an associate professor of computer science at North Carolina State University, created a supercomputing cluster of eight Sony PS3 systems. At the time, Mueller was quoted by NC State University’s Engineering News as saying, “Places like Google, the stock market, automotive design companies and scientist use clusters, but this is the first academic computer cluster built from PlayStation 3s.” Computer scientists at The University of Alabama in Huntsville and the University of Massachusetts, Dartmouth, have taken the clustering idea a step further and recently published research using simulations run on the Sony game systems. Dr. Gaurav Khanna, an assistant physics professor UMass Dartmouth, and Dr. Lior Burko, an assistant physics professor at UAHuntsville, used a cluster of 16 PlayStation 3s, dubbed the PS3 Gravity Grid, to simulate a vibrating black hole and determine the speed at which it stops vibrating. Why use PS3s and not a traditional supercomputing platform, such as the National Science Foundation’s TeraGrid? Cost. In a article on the PS3 project, Burko was quoted as saying “If we had rented computing time from a supercomputer center it would have cost us about $5,000 to run our simulation one time.” And, for their experiment, Khanna and Burko needed to run the simulation dozens of times. Considering a new 80GB PS3 retails for about $400, the 16 PS3s needed for Khanna’s cluster would cost around $6,400. For just over the cost of a single run, researchers were able to build a resource that they could use over and over again.

Frank Mueller
email : mueller [at] cs.ncsu [dot] edu

Why scientists love games consoles
BY Roger Highfield  /  17 Feb 2008

Leading scientists are turning to the extraordinary power of games consoles to do their sums and simulate everything from colliding black holes to the effects of drugs. Reprogram a PlayStation and it will perform feats that would be unthinkable on an ordinary PC because the kinds of calculations required to produce the realistic graphics now seen in sophisticated video games are similar to those used by chemists and physicists as they simulate the interactions between particles ranging from the molecular to the astronomical. Such simulations are usually carried out on a supercomputer, but time on these machines is expensive and in short supply. By comparison, games consoles are cheap and easily available, says New Scientist. “There is no doubt that the entertainment industry is helping to drive the direction of high performance computational science – exploiting the power available to the masses will lead to many research breakthroughs in the future,” comments Prof Peter Coveney of University College London, who uses supercomputing in chemistry.

Prof Gaurav Khanna at the University of Massachusetts has used an array of 16 PS3s to calculate what will happen when two black holes merge. According to Prof Khanna, the PS3 has unique features that make it suitable for scientific computations, namely, the Cell processor dubbed a “supercomputer-on-a-chip.” And it runs on Linux, “so it does not limit what you can do. A single high-precision simulation can sometimes cost more than 5,000 hours on the TeraGrid supercomputers. For the same cost, you can build your own supercomputer using PS3s. It works just as well, has no long wait times and can be used over and over again, indefinitely,” Prof Khanna says.

And Todd Martínez has persuaded the supercomputing centre at the University of Illinois, Urbana-Champaign, to buy eight computers each driven by two of the specialised chips that are at the heart of Sony’s PlayStation 3 console. Together with his student Benjamin Levine he is using them to simulate the interactions between the electrons in atoms, as part of work to see how proteins in the body dovetail with drug molecules. He was inspired while browsing through his son’s games console’s technical specification “I noticed that the architecture looked a lot like high performance supercomputers I had seen before,” he says. “That’s when I thought about getting one for myself.”

An effort to interconnect tends of thousands of PS3s is under way with Folding@Home , an effort based at Stanford University to study the way proteins fold, which plays a key role in Alzheimer’s, Huntington’s Disease and Parkinson’s disease. With about 50,000 such machines, the organisers of this huge distributed computing effort hope to achieve performance on the petaflop scale. The Wii, made by Nintendo, has a motion tracking remote control unit that is cheaper than a comparable device built from scratch. The device recently emerged as a tool to help surgeons to improve their technique. Meanwhile, neurologist Thomas Davis at the Vanderbilt Medical Centre in Nashville, Tennessee, is using it to measure movement deficiencies in Parkinson’s patients to assess how well a patient can move when they take part in drug trials.

Folding@home Reaches Million PS3-User Milestone
BY Susan Arendt / February 4, 2008

Sony recently announced that more than one million PlayStation 3 owners are taking part in Folding@home, the distributed computing project run by Stanford University. The participation of PS3 owners in Folding@home allows the project “to address questions previously considered impossible to tackle computationally, with the goal of finding cures to some of the world’s most life-threatening diseases,” said project lead Vijay Pande. More one million PS3 owners as registered participants breaks down to about two new registrants per minute, or about 3,000 new Folding@home members per day.

Folding@home’s mission is to try and better understand how proteins fold, and how misfolds are related to various diseases like cancer, Alzheimer’s and Parkinson’s. PS3s currently comprise about 74 percent of the entire computing power of Folding@home. When the project achieved a petaflop in September, it officially became the most powerful distributed computing network in the world, at least according to folks at Guinness World Records. A network of 10,000 PS3s can accomplish the same amount of Folding@home work as 100,000 PCs, making their computational ability an invaluable asset to the project.



Researchers have harnessed the powerful silicon chips used in the Xbox 360 console to solve scientific conundrums. Academics at the University of Warwick believe they are the first to use the processors as a cheap way to conduct “parallel processing”. Parallel computing is where a number of processors are run in tandem, allowing a system to rapidly crunch data. Researchers traditionally have to book time on a dedicated “cluster” system or splash out setting up a network of PCs.

Instead, the Warwick team harnessed a single Xbox 360 Graphical Processing Unit (GPU). The chip was able to perform parallel processing functions at a fraction of the cost a traditional systems. Dr Simon Scarle, a researcher on the team, built the system to help him model how electrical signals in the heart moved around damaged cardiac cells. Dr Scarle, who previously worked as a software engineer at Microsoft’s Rare studio, had first hand experience of tapping into the power of GPU technology.

Speaking to BBC News, Dr Scarle said that the the code controlling the chip was modified, so instead of working out graphical calculations, it could perform other ones instead. “You don’t quite get the full whammy of a cluster, but its close,” he said. “Instead of pumping out stunning graphics, it’s reworked; in the case of my research, rather than calculating the position of a structure and texture it’s now working out the different chemical levels in a cell.”

Real world computing
There has been cross-pollination between game consoles and real world computing in the past. Roadrunner, officially the worlds fastest supercomputer, uses the same processor technology as that found in Sony’s PlayStation 3. However, it is thought that this is the first time an Xbox has been used to perform parallel processing, albeit on a single chip.

Dr Scarle said that linking more than one Xbox together using the techniques would not be impossible. “It could be done, but you would have to go over the internet – through something like Xbox live – rather than a standard method. However, without development tools, it wouldn’t be easy.” Xbox live allows gamers to play against each other over the internet. “Sony have been into this [parallel processing] for some time, releasing development kits, and Folding@home comes as standard,” he added.

Folding@home is a project that harnesses the spare processing power of PCs, Macs, Linux systems and PlayStation 3’s to help understand the cause of diseases. The network has more than 4.3 petaflop of computing power – the equivalent of more than 4,300 trillion calculations per second. Roadrunner, by comparison can operate at just over one petaflop. The results of the University of Warwick research are published in the journal Computational Biology and Chemistry.

Simon Scarle
email : S.Scarle [at] [dot] uk

New Software Could Smooth Supercomputing Speed Bumps
BY Larry Greenemeier / 16 October 2009

Supercomputers have long been an indispensable, albeit expensive, tool for researchers who need to make sense of vast amounts of data. One way that researchers have begun to make high-speed computing more powerful and also more affordable is to build systems that split up workloads among fast, highly parallel graphics processing units (GPUs) and general-purpose central processing units (CPUs).

There is, however, a problem with building these co-processed computing hot rods: A common programming interface for the different GPU models has not been available. Even though the lion’s share of GPUs are made by Advanced Micro Devices, Inc. (AMD) and NVIDIA Corp., the differences between the two companies’ processors mean that programmers have had to write software to meet the requirements of the particular GPU used by their computers.

Now, this is changing as AMD, NVIDIA and their customers (primarily computer- and game system–makers) throw their support behind a standard way of writing software called the OpenComputing Language (OpenCL), which works across both GPU brands. A longer-term goal behind OpenCL is to create a common programming interface that will even let software writers create applications that run both GPUs and CPUs with few modifications, cutting the time and effort required to harness supercomputing power for scientific endeavors.

Researchers at Virginia Polytechnic Institute and State University (Virginia Tech) in Blacksburg, Va., are hoping that OpenCL can help them write software that can run on GPUs made either by AMD or NVIDIA. Using a computer equipped with both a CPU and an AMD GPU, the Virginia Tech researchers were able to compute and visualize biomolecular electrostatic surface potential (pdf) 1,800 times faster (from 22.4 hours to less than a minute) than they could with a similar computer driven only by a CPU.

The National Institutes of Health (NIH) has committed more than $1.3 million in funding from 2006 through 2011 for a project led by Alexey Onufriev, an associate professor in Virginia Tech’s departments of Computer Science and Physics, to represent water computationally, because water is key to modeling biological molecules. “When you model a molecule at the atomic level,” Onufriev says, “you need to know the impact that water will have on that model.”

This is the type of program that GPUs map quite well, says Wu Feng, director of Virginia Tech’s Synergy Laboratory and an associate professor in the school’s departments of Computer Science and Electrical & Computer Engineering. “These applications tend to be compute-intensive and regular in their computation,” he adds, “regular in the sense that you’re calculating electrostatic potential between pairs of points.”

CPUs, however, are better suited than GPUs to computing tasks that require the computer to make a decision. For example, if a string of computing tasks were likened to a line of people waiting to enter a stadium, Feng says, the GPU would be very good at dividing up the people into multiple lines and taking their tickets as they enter—as long as everyone has the same type of ticket. If some people had special tickets that allowed them to go backstage or entitled them to some other privilege, it would greatly slow the GPU’s capabilities as the processor decided what to do with the nonconformists. “GPUs work well today when they are given a single instruction for a repetitive task,” he adds.

Feng and his team are adapting an electrostatic potential program for Onufriev’s lab so that it will work specifically on computers running GPUs made by AMD. Feng notes that as OpenCL is embraced more widely, he will be able to write programs that can communicate with any type of GPU supporting OpenCL, regardless of manufacturer, and eventually write code that provides instructions for both CPUs and GPUs. (Earlier this week, AMD made available the latest version of its software development tools that the company says allows programmers to use OpenCL to write applications that let GPUs operate in concert with CPUs.)

With this type of computing power and versatility, Onufriev says many limitations will be lifted regarding the types of research he can tackle. Another of his projects is studying how the nearly two meters of DNA in each cell is packed into the cell’s nucleus. “The way DNA is packed determines the genetic message,” he says. “No one knows exactly how this works. We’re hoping to get stacks of GPU machines where we can run simulations requiring massive computations that help us better understand DNA packing.” Such work would be aided greatly by systems that can make use of both GPUs and CPUs.


The Do-It-Yourself Supercomputer
BY William W. Hargrove, Forrest M. Hoffman and Thomas Sterling

In the well-known stone soup fable, a wandering soldier stops at a poor village and says he will make soup by boiling a cauldron of water containing only a shiny stone. The townspeople are skeptical at first but soon bring small offerings: a head of cabbage, a bunch of carrots, a bit of beef. In the end, the cauldron is filled with enough hearty soup to feed everyone. The moral: cooperation can produce significant achievements, even from meager, seemingly insignificant contributions.

Researchers are now using a similar cooperative strategy to build supercomputers, the powerful machines that can perform billions of calculations in a second. Most conventional supercomputers employ parallel processing: they contain arrays of ultrafast microprocessors that work in tandem to solve complex problems such as forecasting the weather or simulating a nuclear explosion. Made by IBM, Cray and other computer vendors, the machines typically cost tens of millions of dollars–far too much for a research team with a modest budget. So over the past few years, scientists at national laboratories and universities have learned how to construct their own supercomputers by linking inexpensive PCs and writing software that allows these ordinary computers to tackle extraordinary problems.

In 1996 two of us (Hargrove and Hoffman) encountered such a problem in our work at Oak Ridge National Laboratory (ORNL) in Tennessee. We were trying to draw a national map of ecoregions, which are defined by environmental conditions: all areas with the same climate, landforms and soil characteristics fall into the same ecoregion. To create a high-resolution map of the continental U.S., we divided the country into 7.8 million square cells, each with an area of one square kilometer. For each cell we had to consider as many as 25 variables, ranging from average monthly precipitation to the nitrogen content of the soil. A single PC or workstation could not accomplish the task. We needed a parallel-processing supercomputer–and one that we could afford!

Our solution was to construct a computing cluster using obsolete PCs that ORNL would have otherwise discarded. Dubbed the Stone SouperComputer because it was built essentially at no cost, our cluster of PCs was powerful enough to produce ecoregion maps of unprecedented detail. Other research groups have devised even more capable clusters that rival the performance of the world’s best supercomputers at a mere fraction of their cost. This advantageous price-to-performance ratio has already attracted the attention of some corporations, which plan to use the clusters for such complex tasks as deciphering the human genome. In fact, the cluster concept promises to revolutionize the computing field by offering tremendous processing power to any research group, school or business that wants it.

Beowulf And Grendel
The notion of linking computers together is not new. In the 1950s and 1960s the U.S. Air Force established a network of vacuum-tube computers called SAGE to guard against a Soviet nuclear attack. In the mid-1980s Digital Equipment Corporation coined the term “cluster” when it integrated its mid-range VAX minicomputers into larger systems. Networks of workstations–generally less powerful than minicomputers but faster than PCs–soon became common at research institutions. By the early 1990s scientists began to consider building clusters of PCs, partly because their mass-produced microprocessors had become so inexpensive. What made the idea even more appealing was the falling cost of Ethernet, the dominant technology for connecting computers in local-area networks.

Advances in software also paved the way for PC clusters. In the 1980s Unix emerged as the dominant operating system for scientific and technical computing. Unfortunately, the operating systems for PCs lacked the power and flexibility of Unix. But in 1991 Finnish college student Linus Torvalds created Linux, a Unix-like operating system that ran on a PC. Torvalds made Linux available free of charge on the Internet, and soon hundreds of programmers began contributing improvements. Now wildly popular as an operating system for stand-alone computers, Linux is also ideal for clustered PCs.

The first PC cluster was born in 1994 at the NASA Goddard Space Flight Center. NASA had been searching for a cheaper way to solve the knotty computational problems typically encountered in earth and space science. The space agency needed a machine that could achieve one gigaflops–that is, perform a billion floating-point operations per second. (A floating-point operation is equivalent to a simple calculation such as addition or multiplication.) At the time, however, commercial supercomputers with that level of performance cost about $1 million, which was too expensive to be dedicated to a single group of researchers.

One of us (Sterling) decided to pursue the then radical concept of building a computing cluster from PCs. Sterling and his Goddard colleague Donald J. Becker connected 16 PCs, each containing an Intel 486 microprocessor, using Linux and a standard Ethernet network. For scientific applications, the PC cluster delivered sustained performance of 70 megaflops–that is, 70 million floating-point operations per second. Though modest by today’s standards, this speed was not much lower than that of some smaller commercial supercomputers available at the time. And the cluster was built for only $40,000, or about one tenth the price of a comparable commercial machine in 1994.

NASA researchers named their cluster Beowulf, after the lean, mean hero of medieval legend who defeated the giant monster Grendel by ripping off one of the creature’s arms. Since then, the name has been widely adopted to refer to any low-cost cluster constructed from commercially available PCs. In 1996 two successors to the original Beowulf cluster appeared: Hyglac (built by researchers at the California Institute of Technology and the Jet Propulsion Laboratory) and Loki (constructed at Los Alamos National Laboratory). Each cluster integrated 16 Intel Pentium Pro microprocessors and showed sustained performance of over one gigaflops at a cost of less than $50,000, thus satisfying NASA’s original goal.

The Beowulf approach seemed to be the perfect computational solution to our problem of mapping the ecoregions of the U.S. A single workstation could handle the data for only a few states at most, and we couldn’t assign different regions of the country to separate workstations–the environmental data for every section of the country had to be compared and processed simultaneously. In other words, we needed a parallel-processing system. So in 1996 we wrote a proposal to buy 64 new PCs containing Pentium II microprocessors and construct a Beowulf-class supercomputer. Alas, this idea sounded implausible to the reviewers at ORNL, who turned down our proposal.

Undeterred, we devised an alternative plan. We knew that obsolete PCs at the U.S. Department of Energy complex at Oak Ridge were frequently replaced with newer models. The old PCs were advertised on an internal Web site and auctioned off as surplus equipment. A quick check revealed hundreds of outdated computers waiting to be discarded this way. Perhaps we could build our Beowulf cluster from machines that we could collect and recycle free of charge. We commandeered a room at ORNL that had previously housed an ancient mainframe computer. Then we began collecting surplus PCs to create the Stone SouperComputer.

A Digital Chop Shop
The strategy behind parallel computing is “divide and conquer.” A parallel-processing system divides a complex problem into smaller component tasks. The tasks are then assigned to the system’s nodes–for example, the PCs in a Beowulf cluster–which tackle the components simultaneously. The efficiency of parallel processing depends largely on the nature of the problem. An important consideration is how often the nodes must communicate to coordinate their work and to share intermediate results. Some problems must be divided into myriad minuscule tasks; because these fine-grained problems require frequent internode communication, they are not well suited for parallel processing. Coarse-grained problems, in contrast, can be divided into relatively large chunks. These problems do not require much communication among the nodes and therefore can be solved very quickly by parallel-processing systems.

Anyone building a Beowulf cluster must make several decisions in designing the system. To connect the PCs, researchers can use either standard Ethernet networks or faster, specialized networks, such as Myrinet. Our lack of a budget dictated that we use Ethernet, which is free. We chose one PC to be the front-end node of the cluster and installed two Ethernet cards into the machine. One card was for communicating with outside users, and the other was for talking with the rest of the nodes, which would be linked in their own private network. The PCs coordinate their tasks by sending messages to one another. The two most popular message-passing libraries are message-passing interface (MPI) and parallel virtual machine (PVM), which are both available at no cost on the Internet. We use both systems in the Stone SouperComputer.

Many Beowulf clusters are homogeneous, with all the PCs containing identical components and microprocessors. This uniformity simplifies the management and use of the cluster but is not an absolute requirement. Our Stone SouperComputer would have a mix of processor types and speeds because we intended to use whatever surplus equipment we could find. We began with PCs containing Intel 486 processors but later added only Pentium-based machines with at least 32 megabytes of RAM and 200 megabytes of hard-disk storage.

It was rare that machines met our minimum criteria on arrival; usually we had to combine the best components from several PCs. We set up the digital equivalent of an automobile thief’s chop shop for converting surplus computers into nodes for our cluster. Whenever we opened a machine, we felt the same anticipation that a child feels when opening a birthday present: Would the computer have a big disk, lots of memory or (best of all) an upgraded motherboard donated to us by accident? Often all we found was a tired old veteran with a fan choked with dust.

Our room at Oak Ridge turned into a morgue filled with the picked-over carcasses of dead PCs. Once we opened a machine, we recorded its contents on a “toe tag” to facilitate the extraction of its parts later on. We developed favorite and least favorite brands, models and cases and became adept at thwarting passwords left by previous owners. On average, we had to collect and process about five PCs to make one good node.

As each new node joined the cluster, we loaded the Linux operating system onto the machine. We soon figured out how to eliminate the need to install a keyboard or monitor for each node. We created mobile “crash carts” that could be wheeled over and plugged into an ailing node to determine what was wrong with it. Eventually someone who wanted space in our room bought us shelves to consolidate our collection of hardware. The Stone SouperComputer ran its first code in early 1997, and by May 2001 it contained 133 nodes, including 75 PCs with Intel 486 microprocessors, 53 faster Pentium-based machines and five still faster Alpha workstations, made by Compaq.

Upgrades to the Stone SouperComputer are straightforward: we replace the slowest nodes first. Each node runs a simple speed test every hour as part of the cluster’s routine housekeeping tasks. The ranking of the nodes by speed helps us to fine-tune our cluster. Unlike commercial machines, the performance of the Stone SouperComputer continually improves, because we have an endless supply of free upgrades.

Parallel Problem Solving
Parallel programming requires skill and creativity and may be more challenging than assembling the hardware of a Beowulf system. The most common model for programming Beowulf clusters is a master-slave arrangement. In this model, one node acts as the master, directing the computations performed by one or more tiers of slave nodes. We run the same software on all the machines in the Stone SouperComputer, with separate sections of code devoted to the master and slave nodes. Each microprocessor in the cluster executes only the appropriate section. Programming errors can have dramatic effects, resulting in a digital train wreck as the crash of one node derails the others. Sorting through the wreckage to find the error can be difficult.

Another challenge is balancing the processing workload among the cluster’s PCs. Because the Stone SouperComputer contains a variety of microprocessors with very different speeds, we cannot divide the workload evenly among the nodes: if we did so, the faster machines would sit idle for long periods as they waited for the slower machines to finish processing. Instead we developed a programming algorithm that allows the master node to send more data to the faster slave nodes as they complete their tasks. In this load-balancing arrangement, the faster PCs do most of the work, but the slower machines still contribute to the system’s performance.

Our first step in solving the ecoregion mapping problem was to organize the enormous amount of data–the 25 environmental characteristics of the 7.8 million cells of the continental U.S. We created a 25-dimensional data space in which each dimension represented one of the variables (average temperature, precipitation, soil characteristics and so on). Then we identified each cell with the appropriate point in the data space [see illustration A]. Two points close to each other in this data space have, by definition, similar characteristics and thus are classified in the same ecoregion. Geographic proximity is not a factor in this kind of classification; for example, if two mountaintops have very similar environments, their points in the data space are very close to each other, even if the mountaintops are actually thousands of miles apart.

Once we organized the data, we had to specify the number of ecoregions that would be shown on the national map. The cluster of PCs gives each ecoregion an initial “seed position” in the data space. For each of the 7.8 million data points, the system determines the closest seed position and assigns the point to the corresponding ecoregion. Then the cluster finds the centroid for each ecoregion–the average position of all the points assigned to the region. This centroid replaces the seed position as the defining point for the ecoregion. The cluster then repeats the procedure, reassigning the data points to ecoregions depending on their distances from the centroids. At the end of each iteration, new centroid positions are calculated for each ecoregion. The process continues until fewer than a specified number of data points change their ecoregion assignments. Then the classification is complete.

The mapping task is well suited for parallel processing because different nodes in the cluster can work independently on subsets of the 7.8 million data points. After each iteration the slave nodes send the results of their calculations to the master node, which averages the numbers from all the subsets to determine the new centroid positions for each ecoregion. The master node then sends this information back to the slave nodes for the next round of calculations. Parallel processing is also useful for selecting the best seed positions for the ecoregions at the very beginning of the procedure. We devised an algorithm that allows the nodes in the Stone SouperComputer to determine collectively the most widely dispersed data points, which are then chosen as the seed positions. If the cluster starts with well-dispersed seed positions, fewer iterations are needed to map the ecoregions.

The result of all our work was a series of maps of the continental U.S. showing each ecoregion in a different color [see illustrations B and C]. We produced maps showing the country divided into as few as four ecoregions and as many as 5,000. The maps with fewer ecoregions divided the country into recognizable zones–for example, the Rocky Mountain states and the desert Southwest. In contrast, the maps with thousands of ecoregions are far more complex than any previous classification of the country’s environments. Because many plants and animals live in only one or two ecoregions, our maps may be useful to ecologists who study endangered species.

In our first maps the colors of the ecoregions were randomly assigned, but we later produced maps in which the colors of the ecoregions reflect the similarity of their respective environments. We statistically combined nine of the environmental variables into three composite characteristics, which we represented on the map with varying levels of red, green and blue. When the map is drawn this way, it shows gradations of color instead of sharp borders: the lush Southeast is mostly green, the cold Northeast is mainly blue, and the arid West is primarily red [see illustration D].

Moreover, the Stone SouperComputer was able to show how the ecoregions in the U.S. would shift if there were nationwide changes in environmental conditions as a result of global warming. Using two projected climate scenarios developed by other research groups, we compared the current ecoregion map with the maps predicted for the year 2099. According to these projections, by the end of this century the environment in Pittsburgh will be more like that of present-day Atlanta, and conditions in Minneapolis will resemble those in present-day St. Louis. [see Stone SouperComputer’s Global Warming Forecast]

The Future Of Clusters
The traditional measure of supercomputer performance is benchmark speed: how fast the system runs a standard program. As scientists, however, we prefer to focus on how well the system can handle practical applications. To evaluate the Stone SouperComputer, we fed the same ecoregion mapping problem to ORNL’s Intel Paragon supercomputer shortly before it was retired. At one time, this machine was the laboratory’s fastest, with a peak performance of 150 gigaflops. On a per-processor basis, the run time on the Paragon was essentially the same as that on the Stone SouperComputer. We have never officially clocked our cluster (we are loath to steal computing cycles from real work), but the system has a theoretical peak performance of about 1.2 gigaflops. Ingenuity in parallel algorithm design is more important than raw speed or capacity: in this young science, David and Goliath (or Beowulf and Grendel!) still compete on a level playing field.

The Beowulf trend has accelerated since we built the Stone SouperComputer. New clusters with exotic names–Grendel, Naegling, Megalon, Brahma, Avalon, Medusa and theHive, to mention just a few–have steadily raised the performance curve by delivering higher speeds at lower costs. As of last November, 28 clusters of PCs, workstations or servers were on the list of the world’s 500 fastest computers. The LosLobos cluster at the University of New Mexico has 512 Intel Pentium III processors and is the 80th-fastest system in the world, with a performance of 237 gigaflops. The Cplant cluster at Sandia National Laboratories has 580 Compaq Alpha processors and is ranked 84th. The National Science Foundation and the U.S. Department of Energy are planning to build even more advanced clusters that could operate in the teraflops range (one trillion floating-point operations per second), rivaling the speed of the fastest supercomputers on the planet.

Beowulf systems are also muscling their way into the corporate world. Major computer vendors are now selling clusters to businesses with large computational needs. IBM, for instance, is building a cluster of 1,250 servers for NuTec Sciences, a biotechnology firm that plans to use the system to identify disease-causing genes. An equally important trend is the development of networks of PCs that contribute their processing power to a collective task. An example is SETI@home, a project launched by researchers at the University of California at Berkeley who are analyzing deep-space radio signals for signs of intelligent life. SETI@home sends chunks of data over the Internet to more than three million PCs, which process the radio-signal data in their idle time. Some experts in the computer industry predict that researchers will eventually be able to tap into a “computational grid” that will work like a power grid: users will be able to obtain processing power just as easily as they now get electricity.

Above all, the Beowulf concept is an empowering force. It wrests high-level computing away from the privileged few and makes low-cost parallel-processing systems available to those with modest resources. Research groups, high schools, colleges or small businesses can build or buy their own Beowulf clusters, realizing the promise of a supercomputer in every basement. Should you decide to join the parallel-processing proletariat, please contact us through our Web site ( and tell us about your Beowulf-building experiences. We have found the Stone Soup to be hearty indeed.

Further Information:
Cluster Computing: Linux Taken to the Extreme. F. M. Hoffman and W. W. Hargrove in Linux Magazine, Vol. 1, No. 1, pages 56-59; Spring 1999.

Using Multivariate Clustering to Characterize Ecoregion Borders. W. W. Hargrove and F. M. Hoffman in Computers in Science and Engineering, Vol. 1, No. 4, pages 18-25; July/August 1999.

How to Build a Beowulf: A Guide to the Implementation and Application of PC Clusters. Edited by T. Sterling, J. Salmon, D. J. Becker and D. F. Savarese. MIT Press, 1999.



by Julieta Aranda and Anton Vidokle

Time banking is not barter. Barter economies have been in practice throughout history, but the idea of using time as a unit of exchange only appeared shortly after the Industrial Revolution. The origins of time-based currency can be traced both to the American anarchist Josiah Warren, who ran the Cincinnati Time Store from 1827 until 1830, and to the British industrialist and philanthropist Robert Owen, who founded the utopian “New Harmony” community. While both systems are based on the principles of mutualism and the labor theory of value, Josiah Warren’s currency was explicitly pegged to time as a measure of specific goods or labor. For example, 3 hours of carpenter’s work would be considered equivalent to 3-12 pounds of corn. Meanwhile, Robert Owen’s currency simply bore an inscription referring to a number of hours, which presumably could be exchanged for however many pounds of corn a farmer would deem adequate or labor of any kind.

There have been other examples of alternative economies in recent history, most notably the “Notgeld” emergency money that appeared in Germany after the hyperinflation of 1923. Notgeld was unofficial “money” issued by cities, boroughs, and even private companies to compensate for a shortage of official coins and bills. As long as Notgeld was accepted, no harm was done, as it was understood to be a valid certificate of debt. Notgeld was actually more stable than real money, since its denomination was often pegged to material goods, such as gold, corn, meat, and so forth. The currency itself was purposefully made to be very pretty to encourage people to save the bills. This way, the debt would never have to be paid. Notgeld was printed on all kinds of material—leather, fabric, porcelain, silk, and tin foil. Since it was not legal tender, the only people who dealt in it were those who wanted to. As a result, it had a stabilizing effect on the official currency, which was still in circulation.

The first successful contemporary time bank was started in 1991 by Paul Glover in Ithaca, New York. Following his idea, people began to exchange time, which led to the creation of a time-based currency—the “Ithaca Hours,” which even local businesses began to accept, and which still flourishes. Time banking and service exchange have since developed into a full-fledged movement, usually centered around local communities.

Time/Bank at e-flux is modeled on existing time banks. Every Time/Bank transaction will allow individuals to request, offer, and pay for services in “Hour Notes.” When a task is performed, the credit hours earned may be saved and used at a later date, given to another person, or contributed towards developing larger communal projects. For example, if you happen to be in Beijing or Hamburg and need someone to help you shop for materials or translate a press release, you would be able to draw on resources from Time/Bank without exchanging any money.

Through Time/Bank, we hope to create an immaterial currency and a parallel micro-economy for the cultural community, one that is not geographically bound, and that will create a sense of worth for many of the exchanges that already take place within our field—particularly those that do not produce commodities and often escape the structures that validate only certain forms of exchange as significant or profitable.

timebank network schematic (Mihos’ timebank network map)




‘Hours’ type: First modeled in Ithaca NY in 1991, Hours currency is based on issuing paper currency to a core group of members who agree to accept it. It is usually roughly pegged to the national money (1 Hour = $10), but cannot usually be redeemed for it. The largest and most successful system is in Ithaca NY.

Time Bank: Time Banks are like LETS systems but denominate the currency in hours of service rather than national money. Everyone in the system values their time equally, and therefore the system operates outside the sphere of the IRS. Edgar Cahn is the founder of the Time Banks movement in the USA ( However, the idea of trading time dates back for many hundreds of years in some places (most notably Bali).

“A central database is kept with everyone’s “account” information. When services are performed, the parties log it on the website and the respective accounts automatically get credited/debited. The credits (known simply as Hours) exist only in this electronic form. We may print notes someday, but strictly speaking, those aren’t necessary. (75% of all U.S. dollars exist solely in electronic form, by the way.) We need not worry about squaring everyone’s account to zero on a day-to-day basis. The system can continue indefinitely, with people vacillating from plus to minus, staying put for a while, or whatever. Hopefully no one will keep a large negative balance for a long time. If that happens, other participants can suggest ways of earning hours to that person. If that doesn’t work, people can cease performing services for them. No one is ever under any obligation to trade, for any reason. Bottom line, if something isn’t worth the price, i.e. if so and so doing 2 hours of x for you isn’t worth 2 hours of your time, then don’t have them do it. Besides mutual agreement, there are really no hard and fast rules. The point of hOURS is not to constrain anyone or be a burden in any way, but to free up possibilities and potential. The website also serves as a sort of ‘yellow pages’ in which everyone can list the goods and services they have to offer, and those which they need, which can be just about anything.

Can goods be bought and sold under the hOURS system too? Sure, just remember an Hour of money represents an hour of time. Use that to determine what a desirable price would be. If an item can be readily reconceived of as a service (the service of providing that item) use that to determine the price. Businesses can get involved as well. So why isn’t the ‘h’ capitalized you may be wondering: Because both “hours” and “ours” are good names for the program. The first is obvious, but “OURS” captures some important features of it as well. It’s literally ours, belonging to the people involved. No bank or corporation has the ability to pull funding. No absentee owners siphon off rents and dividends. A community that uses hOURS is strengthened by the increased interpersonal contacts and becomes wealthier through two mechanisms mentioned above. We need not suffer any problems that come from the so called credit crunch, nor any problems stemming from the nature of that credit, such as its control by elites.


General principles
1. Give hOURS the benefit of presumption.
hOURS is better than the main economy in the sense of being saner and having a better social impact. In terms of scale and variety of opportunity of course, it still falls way short in comparison. So people obviously still need to use the dollar economy. But let that be your rationale – that you need to, even though it will constitute the lion’s share of your economic life. The point is, don’t let force of habit or force of mindset channel you into using the dominant system. Use hOURS whenever possible.

2. The actual Hours are created by the participants.
The units of currency, Hours, do not exist in a paper form, nor are they doled out by any sort of central issuing authority. They’re created simply by two or more participants getting together and performing services. This is a democratic form of money. You can think of the system as a sort of accountant/observer. For each Hour credited to someone, another is debited. The total amount of Hours (adding up everyone’s balance) is always zero. So if you think about it, someone, in fact usually about half the participants, will be in the red. There’s nothing wrong with that, that’s how it works. If people weren’t willing to have negative balances we wouldn’t have hOURS. So please don’t have any special aversion to that. Don’t bring “dollar-think” into the system. Dollar-debt and Hours-debt are not very comparable. A negative hOURS balance isn’t even a debt at all. It just means you haven’t yet accepted back Hours that you issued. You need not earn Hours first in order to spend them. Leaving the system in the red would be very uncool, but maintaining a negative balance, even for a long time, is fine. No interest is charged.

Each Hour, the unit of currency, represents an hour of time. The price of any service is the time spent performing the service.

3. Reckon time spent from the perspective of the provider(s).
This is mentioned for the case of transactions with more than two people, where it’s not immediately obvious. But it is obvious if you think about it for a minute. Suppose someone does 6 hours of plumbing work for two hOURS participants who live together. The total transaction amount is 6. The provider gets credited 6 and each recipient debited 3. It’s not that each recipient gets debited 6 and the provider credited 12. Imagine then the provider discovered a third participant living there, could they insist on being paid 18? No, why should that matter? It makes more sense to split it three ways, each being debited 2, much as you probably would, had you hired a plumber with dollars. Similarly if two people are performing a service together, they should both be paid in full. The recipient is getting more in such a situation. e.g. the plumbing is really difficult – it takes two people an hour to do. They each get credited a full Hour, and the recipient(s) debited two.

4. Count commuting time.
If someone has to travel to come provide you a service, that’s part of their effort. That might normally be disregarded in the mainstream economy, but that doesn’t mean it’s not real. The economy sweeps a lot of stuff under the rug. That’s the main reason we have environmental destruction; the costs of it don’t show up on anyone’s balance sheet. Let’s strive for an economy that brings things into the light of day. Ivan Illich came up with the concept of shadow work, which is uncompensated labor at the service of the market economy. Examples would be commuting and shopping. They do nothing to promote subsistence and independence. But they are demanded by the market system. Their cost is borne silently by those who perform them. hOURS has a “small is beautiful” streak. It’s good to buy local in order to avoid various transportation costs. When you can choose between providers, have a tendency to go with whomever’s closer. Bringing transporatation costs into the light of day can help us come up with other ways to minimize them, say by combining trips for example. An hOURS transaction with a long commute could be scheduled for when the provider would be making the trip anyway, for other reasons. Then the cost can be split. For simple services, (that most anyone can do) like plant sitting for example, you may wish to contact people who live nearby, even if they don’t specifically offer it, rather than someone who lives further away and does offer it.

5. “Returns”/Complaints
So far there has been a strong spirit of generosity in hOURS. Between that and open communication, most everything should be able to be resolved between the parties involved. In troublesome cases, appeal to Fred for help/ideas/mediation.

6. Consent is the primary value.
As long as all parties to a transaction are happy with the outcome, everything is fine. Other concerns are secondary. Were someone to get lost for 2 hours on their way to provide a service for someone else, it’s fine if they don’t want to include that in the transaction amount. No one should say “Yeah, but we’re supposed to count commuting time.” People should do what they want. Talk it out.

7. Share your knowledge and skills.
If in the process of performing a service you can teach the recipient to do it themselves so they need not call on you again, that would be an admirable thing. hOURS isn’t a perfect economic system, just a big improvement, and a way out. One weakness could be a tendency to be “territorial”. But we can decide not to be like that.

8. No ‘faceless’ organizational members
hOURS exists in order to forge a better economy. While it’s hardly our most important goal, we can take a bite out of the alienation caused by faceless corporations. Groups and businesses are more than welcome to have an account, but they need to designate someone to be “in charge” of it and serve as a contact person. Another reason for this is that hOURS will not be caught in the middle of any group that splits up and fights over the Hours. These rules even apply to joint accounts for married couples. Note that you could have separate accounts without inhibiting any kind of sharing you may wish to do. Hours may be given as a gift. So, someone could work off their husband’s debt, for example, by earning Hours and gifting them over to him.

9. Above all, ask questions.

Exact Change (Re: It’s (Not) a Living,” Meredith Broussard, March 27, 2003)
“The surprise of seeing the local, alternative currency program I started get mentioned in your last issue was definitely of the pleasant variety. Nonetheless, I felt I should write in to clarify two things. I’m not trying to start the system anymore. (H)OURS has been up and running for nearly two years now. And, like all local currencies around the world, (H)OURS is perfectly legal. It’s not counterfeiting as we don’t issue dollars. It’s illegal to make your own coins, and if you peg your currency to the dollar, you can’t print notes with a value of less than $1. We don’t do either.” –Fred Kittelmann, via e-mail

“Fred Kittelmann has a vision to provide Philadelphia with an alternative system of trade that is socially, environmentally, and economically progressive. Last year, he started a local currency called hOURS, which stands for “helluva Organized United Reciprocation System.” Since then, over 100 people have joined, sharing their skills in a variety of areas including catering, psychotherapy, tutoring, babysitting, writing, gardening, and office assistance. Similar to Ithaca Hours, hOURS is an alternative local currency that people can use to exchange goods and services with other participants. hOURS is a “mutual credit” trading system that builds community and encourages people to share resources locally. But unlike other local currencies, hOURS is egalitarian in nature; all people’s work is valued the same – by the time spent working. hOURS is free and open to everyone.

Here’s how it works: individuals register with hOURS and list the goods or services they would like to offer, as well as goods or services that they need. Participants with common offerings/needs exchange the goods or services, paying with hOURS rather than US Currency. The provider’s account is credited with the number of actual hours they spent providing services, which they can then use to obtain services from another hOURS participant. hOURS can also be spent before they are earned, which stimulates use of the system. CASHours are used as a medium of exchange for physical goods, since they can not be directly translated into a time value. Nonprofit organizations can also participate in hOURS. Participants can donate their hOURS to local nonprofit organizations, which can use hOURS to obtain goods or services to further their missions.”

Fred Kittelmann
email : H_OURS [at] yahoo [dot] com

Why I created hOURS / by Fred Kittelmann

“The point of hOURS is to be an alternative economic system, in opposition to the competitive, monetized, capitalist, “free market” we’ve already got. hOURS is by no means intended as an ideal form of economic relations, but rather as a step along the way to unraveling all the nastiness. hOURS is of course also quite puny in scope compared to the dominant system, but others are doing similar things, and there is incredible room and potential for growth. We have to start somewhere and this is a good direction in which to proceed.

One more caveat, before I get comfortable on the soapbox. I’m amazed at how universal the appeal of hOURS has been. I’ve gotten near unanimous enthusiasm from a wide variety of folks. I don’t want to risk narrowing that appeal by emphasizing my own personal motivations, which are likely to be different from those of many of you. I would ask that you judge hOURS based on what it is: a system of reciprocation where people… Don’t judge it based on what I, think it is. In the long run that doesn’t matter.

The main means by which hOURS challenges the dominant system is by providing the opportunity to boycott the almighty dollar, indeed money in general. To replace dollars with another unit of currency, of our own creation, as other LETS’s do, would be to seriously weaken its potential. Presently, most people value money, a fictional construct, over real-life concerns such as working conditions, interpersonal relations and the environment. In conflicts between the above, people generally make decisions based on the “bottom line”. hOURS devalues money, making it less of a necessity in people’s lives. Thus it begins to tip the balance toward the “real” concerns, improving people’s quality of life.

You might ask, isn’t money good for people though? It depends on what’s meant by “people”. To think money can bring an improved standard of living is a narrow viewpoint. It helps whoever gets it, but only at the expense of others: either whoever gave it up, or in the case of more having been printed, everyone’s money becomes a little less valuable. Economic growth in general worsens the standard of living of the human race as a whole through effects like increased monetization, increased dependency on others, the destruction of non-exchange type means of providing for ourselves, and counterproductivity. Cars are a good example of the latter. If only a few people have them, the technology can enhance their quality of life by making transportation easier. But when everyone has a car it’s gridlock and no one goes anywhere. (To be fair, economic growth might not be 100% bad if the business enterprise created thereby, produces a product or service useful to the human species as a whole, and does so at a sensible level – But who has a job like that?!) hOURS is anti-growth and anti-money. By participating, people achieve a degree of autonomy from the big institutions which control the bulk of the money. If we can boycott money, we can boycott the Federal Reserve System, Wall Street, and big corporations. We won’t have to put up with any sort of moneylords, like bankers, that earn their living parasitically, presiding over transactions and skimming off the top. Even the government and professions like law and medicine would eventually be effected. Taken to its logical conclusion, a situation where everyone satisfies their material needs through hOURS rather than the current economy, such institutions lose all their power and surrender their ability to impact public policy and decide what sorts of activities people will engage in. Three cheers for that!!!

Financial empire, perhaps even hierarchy in general, is impossible under hOURS. We all have the same net worth (24/7) to spend as we see fit. The highest standards of living are possible, but fortune as a means of being able to dominate others is not. There’s little room for surplus value, or exploitation of any kind. One particular form of domination, made possible through the manipulability of an abstract concept like money, but impossible with the non-manipulability of units of time, is the wide discrepancy in how the work people do is valued. It’s not right that executives make thousands and thousands of times as much money as Wal-mart clerks do. (Especially when the latter actually do something useful by telling you what aisle such and such is in, but the former set policies that destroy the environment and make decisions like “let’s build bombs instead of bicycles”.) No wage discrepancies are legitimate. Even the neurosurgeon who saves someone’s life should not earn more than the clerk, for the former is not possible without the latter. No one can practice neurosurgery without a slew of others providing for their more mundane needs. Perhaps this is clearer if one considers a farmer rather than a clerk. If no one will grow enough food to feed others as well as themselves, we all have to be farmers. There can be no division of labor. The division of labor is a group effort in which everyone plays an equal part. Therefore everyone should be compensated equally. Neurosurgeons ought to be happy with the prestige and honor that comes with a special skill, and not feel the need to economically crush everyone else under their heel to boot. Turning back the clock a bit we can see an even better example than the farmer. What about the surgeon’s wife who cooks and cleans and so forth, whom he couldn’t do without? The dominant economy has, and continues to, define many people as not just worth less, but worthless. The homeless people on the street can’t even get that minimum wage clerk job. Full employment, according to the Federal Reserve Board, is actually 4% unemployment, a level they roughly maintain through manipulation of the money supply. True full employment would lead to a breakdown of workplace authority as the consequences of losing a job dwindle to next to nothing. hOURS rejects all that crap. In an hOURS world, everyone is welcome. Everyone is useful. And there’s no Fed to say otherwise.

Not that hOURS would be a utopia. It’s still a market type system, which has many problems. One is the matter of collective goods. Markets have no incentive to create any, and tend to destroy those inherent to the aboriginal human condition, like clean air. If pollution is a side effect of a business, no incentive to rethink things will naturally ensue, for it doesn’t show up on the bottom line, whereas dealing with it would. Exchanges are dissociated from their social context. Contrary to working by consensus, who the costs and benefits of economic activity get assigned to means everything. If making widgets in a certain way saves the company $10, but the side effect is that half the world gets cancer, it’s still rational from a business perspective; even more so if the company also makes cancer medications. By the way, it’s not necessary to believe business leaders would have to be monsters to act that way. Psychological mechanisms like denial and ego defense bypass that hurdle, allowing “the system” to operate according to its own logic. Then again, some such people really are monsters. One federal official, several years ago, lauded the destruction of the ozone layer as good for the economy because it would increase sales of sunscreen and sunglasses. And you know what, he’s right. (Bet you didn’t expect me to say that.) Here’s the critical leap to make: If the economy is a thing which makes destruction of the ozone layer ok, we need to get rid of it. We need the ozone layer. We need it bad. We don’t need the economy. (What, that’s crazy.) Here’s the critical observation to help make the leap: The word “economy” has a mystifying effect. It means both the bottom line concerns of sunscreen manufacturers (and other big businesses). And it also means the way we provide for ourselves. Having the word mean both helps narrow, private interest masquerade as the public interest. Believe it or not, we can provide for our material needs without destroying the ozone layer. One thing that makes me want to puke is all the exhortations to travel and fly, and all the corporate welfare being doled out to airlines in the wake of the terrorist attack. Believe it or not, we can provide for our material needs without flinging ourselves great distances through the air. In fact, our standard of living need not suffer at all because of it. Don’t let the two senses of the word muddle your head. In the one sense, the economy is a nasty thing that’s been kicking our asses daily. If we bring it down, how do we maintain an economy in the other sense? hOURS.

All right, returning from that slight tangent, another problem with market economies is that they radically increase the amount of competition in human relations and the general ill will that breeds. We see people getting attached to their niches in the marketplace. When people’s livelihoods become attached to their niches it generates a downright demented consequence: economic activity becomes about creating needs rather than satisfying them. The significance (size) of ones niche (economic territory) becomes more important to ones success than how well that role is fulfilled. My house has a very old furnace built so well it will probably outlast me. Good job satisfying needs, but bad for business – no repeat customers. Making crappy products designed to break down is rewarded under the market system. You get to sell replacements. This problem is also apparent in the efforts of professions to drive up the need for their services.

Though hOURS is such a market type system, there are a few reasons why it can mitigate problems like these nonetheless. 1) We don’t actually have a free market economy. We have corporate socialism, which is even worse. While a marketplace works to the advantage of the strong, (The New York Times gets more out of “the marketplace of ideas” than I do. Big business gets more out of a market economy than I do. The market is a fictitious claim of “level playing field” to help justify inequities.) on rare occasions it can fail to serve the interests of the powerful. When this happens though, the truth comes out; as such results are not allowed to stand. In other words, when Chrysler fails, it doesn’t. Add this to rampant corporate welfare and it’s clear we have a system of corporate socialism designed to serve monstrosities like Chrysler. An actual free market would be a step up. 2) Under hOURS, people won’t be motivated by scarcity. Scarcity makes people freak out. The supply of money is tightly controlled. hOURS can be generated by anyone at any time. Without the need to compete for a scarce resource, people are less driven to act unethically. With an hour being an hour, it greatly reduces people’s ability to increase the value of their wares through mean-spirited anti-social mechanisms (e.g. pillaging the water supply or other collective goods, propaganda and intellectual hocus-pocus making ones skills seem more desirable, etc.) 3) Another consequence of an hour being an hour is that people can shift market niches without a loss of value. Suppose people, under hOURS, got so good at promoting holistic health that people rarely got sick anymore. Loss of livelihood? Not so. They can earn just as many hours at their new bike building business. There will be no need to defend their original business by say, promulgating advertising to dupe people who don’t need their services into thinking they do need them, or doing a crappy job to encourage repeat business. But when someone moves from an area they have expertise to one where they don’t, isn’t this an overall loss for society as a whole? No, because that’s smaller than the overall improvement in social welfare associated with the health services being less needed. It’s just plain old moving on.

An ideal economy would have true reciprocity with concern for all. This is seen in primitive societies where mutual aid is so much the norm that saying “thank you” is frowned upon. (There’s an implication one didn’t expect the thankee to be so generous, and it makes you look like a rude miserly type who keeps careful track of debts and obligations instead of mellowing out.) hOURS clearly isn’t that, but we can use it to start cleaning up the mess. I’m optimistic about its chances for success because it’s an example of a paradigm of activism I developed called “activism from superiority”. The key feature is that “doing the right thing” is the better way to live; meaning that benefits naturally accrue to those involved, in this case the building of a supportive community, not having to pay taxes, and other advantages of relief from the crushing grip of moneylords. Such a framework is more conducive to building a mass movement than traditional efforts which need to acquire resources and work on motivations like guilt and sympathy. The “force of example” to others is stronger, and you get a sort of natural selection as the flow of resources, relatively speaking, favors those who participate over those who don’t. By utilizing the value in what people have to offer that our society considers “throwaway”, and building a community of resistance that withdraws support from the system and grows stronger because of it, we can make great change.”






June 4, 1999, Toronto.

“…those performing here tonight are artists, and you may wonder what an artist is doing getting involved in a project that has to do with the structure of money. Weren’t we all taught that Art and Commerce were polar opposites? But art has to do with symbolism — the human tendency to make one thing stand for another — and money is the most deeply symbolic thing there is. Money as such is, as Oscar Wilde said, perfectly useless. You can’t eat it, drink it, shelter yourself from the cold with it, wear it, or make love with it unless deeply disturbed. In and of itself, it has no emotions, no mind, and no conscience. It doesn’t put out flowers or have children, and it makes a lousy pet. It has meaning only when it circulates, and is exchanged for other things; and money doesn’t do that for itself. People do that, using money as a symbolic token.

We have all been brainwashed into believing that there is only one kind of money — one kind of wealth — and only one measure of human worth — how much money you have — and one kind of exchange — traditional buying and selling. And only one motive to do so — the Siamese twins of consumer greed and the profit motive. We’ve also been told all of this is controlled by a mysterious god called Global Market Forces, who is now beyond our control, but to whom we are forced to sacrifice our children. Thus if international commercial interests suck up our wealth, stomp out our magazines, trash our culture, and dictate what toxic chemicals we must eat and drink and breathe, it is the will of Global Market Forces, whose ways are dark, but who is thought to have our best interests at heart in the end.”
“This extraordinary idea was inspired by a very ordinary need for more money. Now, by advertising their talents or goods in the project’s newsletter, HOUR Town, consumers can find themselves in the money. And small businesses are reaping rewards, too, since the currency gives residents more incentive to shop locally.” –Entrepreneur Magazine, April 1996


Ithaca HOURS: Local currency ‘backed by relationships’
by Anne Ju / Ithaca Journal / October 19, 2005

As has always been the case, Ithaca HOURS aren’t backed by gold, silver or any other commodity. “Ithaca HOURS is backed by our relationships,” said Rebecca Nellenback, HOURS board member. “That’s what we want our town and our community to be.” HOURS users and those interested in joining will celebrate that fact at an annual meeting next Wednesday, from 7 to 8:30 p.m. at the Greater Ithaca Activities Center. The whole community is invited to learn about the local currency system, join at a discounted rate and, for current members, elect new board members.

It’ll also be a chance to promote the local nonprofit’s Web site,, which recently went on the upswing by hiring a Web specialist. Board of Directors President Stephen Burke said they’re in the process of getting the 800-plus member directory on the Web, in part because of the worldwide attention HOURS continues to receive.

For example, just last year a representative from Japan’s Ministry of Finance stopped in Ithaca to talk to Burke about HOURS before boarding a plane to Washington for his next pit stop — with U.S. Federal Reserve Chairman Alan Greenspan. “That’s how seriously they were considering our local currency,” Burke said. Circulating in Ithaca now is about $100,000 worth of Ithaca HOURS, which translates to 10,000 HOURS, according to Burke. In recent years, the program has grown to the point where, at some businesses, employees can be paid part of their salary in HOURS.

At ABC Cafe on Stewart Avenue, employees can opt to be compensated an HOUR in exchange for an hour of labor. An HOUR of labor ends up slightly more than an hour’s wage in regular money, explained owner Ken Hallett. It’s only about 1 percent of the payroll that chooses that option, but it’s enough so that the restaurant, just two years ago, started giving customers the option of purchasing entirely in HOURS. “I think it was once we realized there were enough outlets for using them,” Hallett said. “The idea of using local currency, and having it staying in the community, was attractive.”

Another boost for HOURS has been the availability of $2,000 to $5,000 worth of interest-free HOURS loans, which have bolstered small businesses and also infused relatively large sums of HOURS into the community at once, Burke said. In general, encouraging people to earn and spend locally is, and always has been, the goal of Ithaca HOURS, according to Burke. It creates local wealth while freeing up one’s own money for savings. “It’s definitely a community spirit thing,” said Burke, who owns Small World Music on State Street and, of course, accepts HOURS. In America, “money is so divisive,” Burke said. “We want to turn that completely on its head,” he said.

Creating Community Economics with Local Currency
by Paul Glover [Founder of Ithaca Hours]

Here in Ithaca, New York, we’ve begun to gain control of the social and environmental effects of commerce by issuing over $110,000 of our own local paper money, to thousands of residents, since 1991. Tens of thousands of purchases and many new friendships have been made with this cash, and millions of dollars value of local trading has been added to the Grassroots National Product. We printed our own money because we watched Federal dollars come to town, shake a few hands, then leave to buy rainforest lumber and fight wars. Ithaca’s HOURS, by contrast, stay in our region to help us hire each other. While dollars make us increasingly dependent on transnational corporations and bankers, HOURS reinforce community trading and expand commerce which is more accountable to our concerns for ecology and social justice.

HOUR Town’s thousand listings are a portrait of our community’s capability, bringing into the marketplace time and skills not employed by the conventional market. Residents are proud of income gained by doing work they enjoy. We encounter each other as fellow Ithacans, rather than as winners and losers scrambling for dollars.

The Success Stories of 300 participants published so far testify to the acts of generosity and community that our system prompts. We’re making a community while making a living. As we do so, we relieve the social desperation which has led to compulsive shopping and wasted resources. At the same time Ithaca’s locally-owned stores, which keep more wealth local, make sales and get spending power they otherwise would not have. And over $10,000 of local currency has been donated to over 100 community organizations so far, by the elected HOUR board of directors.

As we discover new ways to provide for each other, we replace dependence on imports. Yet our greater self-reliance, rather than isolating Ithaca, gives us more potential to reach outward with ecological export industry. We can capitalize new businesses with loans of our own cash. HOUR loans are made without interest charges. We regard Ithaca’s HOURS as real money, backed by real people, real time, real skills and tools. Dollars, by contrast, are funny money, backed no longer by gold or silver but by less than nothing- $8.4 trillion of national debt.”

Paul Glover
email : paul5glover [at] yahoo [dot] com

‘[Glover is] founder of Ithaca HOURS local currency, the Ithaca Health Alliance, Citizen Planners of Los Angeles, author of several books and urban histories; degrees in Marketing and in City Management. After 35 years of community organizing on behalf of grassroots economic development and ecological repair started a consultancy called GreenPlanners.

‘Founder, Green Jobs Philly (Philadelphia, PA. 2008) network making it easy for Philadelphians to offer and request green jobs, green services, green grants, and green loans. Editor, Green Jobs Philly NEWS.’ “A reliable treasure trove of info on what’s going on right now in Philadelphia with anything related to the sustainable economy.” –Philadelphia Daily News 1/13/09

Prepare for the Best: A guide to surviving and thriving in Philadelphia’s new green future
by Paul Glover / Jan 28, 2009

Money: Give yourselves credit
Challenges: Extreme capitalism and extreme socialism trample humanity. Lack of cash and credit kills businesses, jobs and homes. Some folks still have lots of money, but most of us have less. Dollar power dwindles because dollars are backed by less than nothing: rusting industry and $10 trillion debt. So we’ll print real money — neighborhood currencies — backed by real people.
Next steps: Mutual enterprise systems (neither Wall Street nor Red Square) celebrate the spirit of regional enterprise when it serves community and nature. They applaud innovations — public and private and personal — that meet real needs. Local trading credits based on local land, skills, time and tools refresh the economy. Poverty is lack of networks more than lack of dollars, and Philadelphia has thousands of networks — business, professional, technical, fraternal, neighborhood, church, union, electoral, senior, youth, racial, sexual, athletic, hobby, family, friends. Woven together they’re a powerful base of regional trust, trade and wealth. Take your pick of neighborhood and sector currencies. Cities may not issue them but may accept them for taxes.

Local heroes: Philadelphia’s 83 credit unions, Valley Green Bank, e3bank, Equal Dollars, barter exchanges and gift economy, Philadelphia Regional and Independent Stock Exchange, Philadelphia Fund for Ecological Living (PhilaFEL).

World champions: Ithaca HOURS, Berkshares, LETS, Time Banking, National Federation of Community Development Credit Unions, Permaculture Credit Union, Grameen Bank microlending, Kiva, Robin Hood Ventures.

Big picture: Dollars control people; local currency connects people.

Chinese Government Studies Ithaca HOURS
by Paul Glover / January 2001

Ithaca’s local paper money, the Ithaca HOUR, has brought hundreds of media, tourists, activists, academics and dignitaries to Ithaca, since 1991. Two years ago, Madame Mitterand, former First Lady of France (and international socialist) visited for a day, preparatory to her visit to the President of the World Bank. Government officials and nonprofit representatives have purchased and spent HOURS, while speaking with residents about how local currency benefits them, and our community.

Last October, HOURS were visited by a high-ranking official of the government of the People’s Republic of China. Wen Tiejun wears several tall hats. He’s Chief Economist of the People’s Bank’s think tank, Senior Consultant of the State Information Center, chief of Economic Reform and Director of Research for Rural Development. He arrived from Beijing to assess the practicality and legality of Ithaca’s local currency. His report will be delivered to the President of the People’s Bank, Dai Xianglong, who will deliver it directly to China’s Premier, Zhu Rongji. Accompanying Wen Tiejun was a professor of sociology from Hong Kong, who returns to Ithaca this November.

Their visit was particularly exciting because it reaffirmed, at the highest level, the critique of global capital which has been one of the many reasons we’ve traded our own money. Wen Tiejun said that the Chinese government has become profoundly concerned about the domination of world trade by U.S. dollars. They understand that the dollar’s value is artificially inflated by U.S. military control of oil regions, extraction of irreplaceable natural resources, and by high consumer debt. “When the bubble breaks,” he said, “there will be chaos in markets. Millions of our rural poor could starve.”

China has been vulnerable to the same banking shocks that befell Thailand, Indonesia and Korea in 1997, as a result of global currency speculation. Food riots resulted. The International Monetary Fund has been pressuring China to replace socialist safety nets with market services, especially since China joined the World Trade Organization this September. Therefore the People’s Bank has been looking for a basis for stable money in an unstable world. Wen Tiejun sees HOURS as a useful tool, since local credits based on time have value which is as steady as the clock. Dollars, on the other hand, are no longer backed by gold or silver but by less than nothing– by a $5.8 trillion national debt. There is in fact not enough gold in the world to support a medium of exchange sufficient to transact the needs of six billion humans. As well, HOURS help stimulate extra trading and job creation, meeting needs on local levels that national currency does not reach. As one World Bank analyst said, the Chinese economy “badly needs a new engine of growth and job creation for tens of millions of rural migrants and laid-off urban workers” (China Watch, 5/8/98).

The Long March of Ithaca HOURS from local experiment to world standard of value will be successful if HOURS shift economic power to communities and workers, promote ecological reliance on regional resources, reinforce regional cultures, and stimulate equitable pay. In Ithaca, millions of dollars worth of HOURS have been traded by thousands of residents, including over 500 businesses (including a bank, movie theaters, bowling alley, health clubs, 55 farmer’s market vendors, doctors, lawyers, plumbers, carpenters, electricians, our hospital and our public library. HOUR grants have been made to 57 community organizations, and HOUR loans up to $30,000 value have been made interest-free.

A History of Ithaca HOURs
by Paul Glover / January 2000

HOURS were created by our community’s need and pioneer spirit. During the 1991 recession I designed prototype HOURS and began asking people to sign up to accept them. The first 30 people agreed. Had these folks said “that’s a dumb idea” or “you could get in trouble,” or had they just laughed, then maybe there’d be no HOUR money. Had there been no Farmer’s Market here, with lively vendors who saw HOURS as yet another way to barter, HOURS would have had a small food base. Catherine Martinez took the first leap of faith there, becoming the first person to accept an HOUR, for her samosa. Had the owners of two popular local movie theaters (Rich Szany & Lynn Cohen) not started taking HOURS from the beginning, at full price, then there’s have been no dramatic retail use of HOURS. Had Greg Spence Wolf not stepped in to earn HOURS cleaning these theaters, then maybe the theaters would have stopped accepting HOURS. Had the Alternatives Federal Credit Union not lent its fiscal credibility to HOURS, by accepting them for fees, acceptance of HOURS would have been slower. Michael Turback of Turback’s restaurant (the fanciest in town) accepted HOURS for full price. James Cummins of Littletree Orchards did likewise. These and dozens of other pioneers pulled lots of HOURS into circulation and spread them around.

Thousands more Ithacans have established HOURS by accepting them and spending them, and by explaining them to family and friends. Tens of thousands of conversations have defined local money and have carried it forward. History is made by public action like this, rather than by special leaders. The general public selects and rejects leaders daily, before knowing their names, without waiting to vote. History pushes individuals forward to meet human needs. That’s why credit for HOURS belongs to the community. Thus my own role, regarded as pivotal, merely was the tool of the community’s need. To emphasize this, I’ve declined to be interviewed on TV and most radio, in order to require media to showcase HOURS as a community process.

During research into our local economy in 1989, I noticed that a little county in South Dakota printed coupons for downtown merchant X-mas promotion, the first I had ever heard of local currency. Two years later, early in 1991, while drawing pictures with my girlfriend’s nieces, I sketched a cartoon “Ithaca Money” note. A few weeks later I saw a sample “Hour” note issued by British industrialist Robert Owen in 1847. This Hour was negotiable only at Owens’ company store and based, I discovered in 1993, on Josiah Warren’s “Time Store” notes of 1827.

On October 19, I bought a samosa at the Farmer’s Market with Half HOUR #751 from from Catherine Martinez– the first use of an HOUR. Neither of us knew what a Half HOUR was worth, since the $10/HOUR rate was then merely suggested. Several more Market vendors enrolled. Stacks of Ithaca Money were distributed all over town with an invitation to everyone to join the fun. Only 46 days after HOURS began, and only ten days after the Farmer’s Market closed for the season, GreenStar Co-op burned down. Local food vendors selling through GreenStar quickly organized a Mini-Market at Henry St. Johns school, and most of them decided to accept HOURS. This provided HOURS with a midwinter food base right from the beginning. Confusion arose about varied HOUR equivalencies ($5, $6, $8, $10, $12) and soon caused us to declare $10.00 as the standard. And it soon became apparent that a smaller denomination, and smaller note size, were needed. The Quarter HOUR was issued six months after we began.

Meanwhile, HOURS were being traded and discussed, and welcomed and ridiculed. A common jibe was, “printing your own money are you? Pretty good business– you must have a fat wallet!” So I showed them the disbursement sheets and explained serial numbers. Those who praised HOURS were thanked and invited to join us; those who criticized HOURS or found them threatening were invited, without resentment, to join if they came to feel differently, and many did so.

The HOUR Advisory Board incorporated as Ithaca HOURS, Inc. in 1998, and hosted the first elections for Board of Directors. Monica Hargraves, director of composting for Co-op Extension (and a former economics professor and economist with the Federal Reserve and IMF), was selected as Board chair.

Time Dollars at Work
by Edgar S. Cahn / Blueprint Magazine / April 1, 1999

Traditional entitlements are perceived as undermining the work ethic. If that is the case, is there a method of social service delivery where Americans see their role as contributors and co-producers of democracy, social justice, healthy communities, and strong families? Time Dollars, a new idea being introduced in communities around the nation and the world, do just that.

Time Dollars are private credits backed and distributed by local non-profit organizations. Time Dollars record, store, and reward transactions where neighbors help neighbors. People earn Time Dollars by using their skills and resources to help others – by providing child or elder care, transportation, cooking, home improvement. The idea is simple: One hour of service equals one Time Dollar. In turn, people spend Time Dollars to get similar help for themselves or their families when the time comes that they need it. Time Dollars can also be redeemed at clubs that gives people discounts on food or health care.

Time Dollars empower any person to convert personal time into purchasing power – stretching limited cash dollars further and matching unused capacity with unmet demand. They reinforce reciprocity and trust. They reward civic engagement and acts of decency in a way that generates social capital, one hour at a time. They are bringing people together in communities all around the nation.

There are many reasons why Time Dollars are an idea whose time has come: First, Time Dollars create the functional equivalent of an extended family in an era in which many families are too small, too fragile, or too dispersed to perform the functions we once counted on them to fulfill. Second, Time Dollars generate and reward the reciprocity and civic engagement that are the essential components of social capital. They can play a role in rebuilding the infrastructure of trust and caring that creates safe neighborhoods and healthy communities. Third, social programs – governmental, non-profit, and private sector – fail if they cannot generate sustained participation by the recipient: students, patients, beneficiaries, at-risk groups. If that participation and labor is essential, we need to define it as work and reward it accordingly. Fourth, government and human service professionals pay attention to people who bring problems, needs, and deficiencies. That inadvertently rewards dependency. We need to shift from “problem-centered” to “asset-centered” responses that enable even the most troubled to pay back by helping others and to secure rewards by using their strengths to contribute to the well-being of all. Fifth, Time Dollars can leverage the charity and pro bono work that businesses already provide by requiring recipients to pay for them in-kind – with volunteer work of their own.

Time Dollars supply a strategy for performing all of these tasks. The exchanges they generate, record, and compensate convert human capacity into the kinetic energy needed to strengthen families, rebuild community, and enhance the quality of civic life. Time Dollars are in use in more than 100 communities in 30 states and three countries (the United States, Great Britain, and Japan). Here are some snapshots of the most innovative practices:

Chicago: More than 1,000 students in 17 elementary schools have earned recycled computers loaded with software by tutoring younger students. The price: 110 Time Dollars (10 have to be earned by the parent). Older students, regardless of their own academic problems, expect and get high performance from younger students.

Washington, D.C.: For fifteen years, the pastor of a local Baptist church was relied on for guidance, comfort, or just a little conversation. However, when the Reverend – who suffers from diabetes – lost his right leg to an infection, he retired from the church. Overwhelmed by the sudden changes in his life, he lived as a recluse – refusing to leave his apartment. The local Time Dollar program helped him adjust to the seemingly insurmountable problems he faced. Once again an active member of the community, he earns Time Dollars by conducting prayer services for his fellow tenants, and he spends them to have his meals prepared by another volunteer.

Brooklyn: Seniors insured through Elderplan, a social Health Maintenance Organization, can cash in Time Dollars for a 25 percent discount on their health insurance by helping other seniors to remain self-sufficient. Seniors provide their own informal support system, including pain management seminars, telephone bingo, home repairs, shopping, rides, and peer counseling. Elderplan now offers a Time Dollar redemption catalog so members can cash in their Time Dollars for health and beauty equipment, taxi vouchers, and social events.

Baltimore: The Housing Authority has incorporated Time Dollars as part of the rent that residents have to pay through community service. Children can earn Time Dollars and pay up to 50 percent of the monthly Time Dollar rent.

Washington, D.C.: A Time Dollar Youth Court brings first offenders before a jury of their peers. Jurors earn Time Dollars as they hear cases and impose sentences that may include community service, restitution, an apology, writing an essay, and jury duty. They redeem the Time Dollars for computers recycled by other youth at three high schools. In those public housing complexes where a jury pool has been formed, a new peer culture enables one youngster to hold another accountable for their actions.

St. Louis: Grace Hill has established a network of stores where Time Dollars will purchase items such as toilet paper, tissues, shampoo, conditioner, bug spray, and detergent. There is even a resident college where Time Dollars pay the tuition.

Time Dollars are a way to compensate and reward the work that ultimately determines the future of this nation: the work that goes into building a vibrant democracy. For too long, we have taken such work for granted – treated it like pure water and clean air – as if it would always be available in abundance. Now we know that the values and virtues of civic life must be developed and carefully guarded. With Time Dollars we can create the currency for a society where reciprocal obligations are the coin of the realm.

{Edgar S. Cahn, Co-Founder and Co-Dean of Antioch School of Law and Special Counsel to Attorney General Robert Kennedy, is President of the Time Dollar Institute.}

Edgar Cahn
email : ecahn [at] udc [dot] edu

“A graduate of the Yale law school, Edgar entered the legal profession determined to use the law to achieve social justice. He started his career in government as special counsel and speechwriter for Attorney General Robert Kennedy under President John Kennedy. As part of that role, he was assigned by Kennedy to the Solicitor General’s office for the government’s amicus brief in civil rights sit-in cases. Edgar also worked to spearhead the first national campaign against hunger and malnutrition in the US, and in doing so, he authored an influential report entitled Hunger USA, which led to legislation enforcing shipments of food to severely malnourished communities on Indian reservations and in the southern United States. His work to fight hunger also involved initiating the earliest litigation to challenge the administration of the food stamp and commodities program, establishing the standing for potential recipients, and assisting in the preparation and defense of controversial documentary, “Hunger in America.”

In 1963, Edgar’s life and work seeking social justice first became known at a larger scale when the article he co-authored with his late wife, Jean Camper Cahn, titled “The War on Poverty: A Civilian Perspective” was published in the Yale Law Journal and became the blueprint for the National Legal Services program. Using their model and working closely with Sargent Shriver and the War on Poverty, Edgar and Jean co-created the National Legal Services program under the Office of Economic Opportunity in the Johnson administration.

Having left the government for work with the Field Foundation in 1968, Edgar founded the Citizens Advocate Center as watchdog on government whose primary purpose was to challenge the colonialism of the Bureau of Indian Affairs. That same year, he authored “Our Brother’s Keeper, the Indian in White America.” Leading American Indian activists did the research for the book, which was intended as a catalyst for change in national policy and which helped to spearhead the official adoption of Indian self-determination as national policy. In 1972, Edgar and his late wife created and founded the Antioch School of Law, which later became the UDC David A. Clarke School of Law and continues the tradition established in the Antioch days to emphasize social justice as a critical role for the law. As law-school deans, Edgar and Jean were the first pioneers of clinical legal education in the US, an approach which is now to be found in law schools throughout the nation.

In 1980 after a massive heart attack that nearly claimed his life, Cahn stepped outside of the law to create yet another social invention, a local, tax-exempt currency called Time Dollars, which are designed to validate and reward the work of the disenfranchised in rebuilding their communities and fighting for social justice. As a distinguished fellow at the London School of Economics, Edgar completed the work on Time Dollars that has led to Time Dollar initiatives being funded by government and major philanthropic foundations in the United States in areas as widespread as juvenile justice, community health, education, public housing, community building, wraparound services for children with emotional disorders, immigrant workers’ rights, and elder care. As the president and founder of the Time Dollar USA, Cahn’s experience with Time Dollars led him in 1995 to develop a radical new framework for social welfare and social justice that turns recipients of service into co-producers of change. He called this new approach “Co-Production.” An example of Co-Production principles at work can be seen in Washington, DC, his home city, where in 1996 he founded the Time Dollar Youth Court, whose mission is to enlist youth in changing the shape of juvenile justice in DC. Sanctioned by the DC Superior Court, the Time Dollar Youth Court is now among the largest youth courts in the nation. Its innovative design enlists more than 400 youth each year, the majority of them former delinquents, as active shapers of a new form of justice for DC youth.”

Money should work for us, not the other way around
What is money? Do we need more of it to solve some of the world’s problems? Or is money the cause of them? Ex-banker Bernard Lietaer thinks the latter is the case. And he has the solution: a new kind of money.
by Jurriaan Kamp | September 2005 issue

You have no idea what money is. Bernard Lietaer is too friendly and modest a man to say it that way, but this is the easiest possible way to sum up his message. If you did know what money was, then you—we—would see to it that we had a different monetary system. Everything revolves around money. It’s more than a cliché; it’s the daily experience of just about every world citizen not part of an indigenous tribe in the Amazon rain forest. And this daily experience involves, above all else, a continuous shortage of money. There is not enough money to send the children to school. Not enough money for hospitals, or to care for the ever-greater numbers of old people who are getting ever older. Not enough money to clean up the environment and keep it that way. There is a lot of work to do, but no money to pay for it. Who among us is not familiar with the feeling of wanting to contribute something but having “no money” to pay for that valuable contribution? The sad conclusion: If we just had more money, the world and our lives would be better. But Bernard Lietaer recommends another way around the problem: We could immerse ourselves in the meaning of money.

He sits on the edge of his chair and poses this question: “Have you ever thought about how much time you spend earning money, and managing or spending the money you’ve earned? And how often have you thought about what money actually is? We expend an enormous amount of energy—and frustration—on something we understand surprisingly little about.” What difference does it make, you might ask? Does it matter whether a fish knows it is swimming in water? Isn’t money like the weather: a given? You can’t change it. Lietaer, a business professor and former banker in Belgium, shakes his head. We are meeting on Cortes Island, off the coast of Vancouver, British Columbia, where he is attending a conference. “That is precisely the difference,” he says. “The weather, indeed, you cannot change. But money wasn’t created by God: We have forgotten that it’s a system designed by people. And I believe that this design, which dates from centuries ago, is at the root of most problems in our society. And the good news is that with a small change to the money system we can make an important contribution to the solution of a number of those problems.”

Lietaer’s proposal is to introduce—alongside the existing national currencies—complementary money systems on a large scale. Based on barter, these systems would fulfill needs and make transactions possible when “normal” money is unavailable. His idea is less revolutionary than it appears. In history, as well as in the world today, there are many successful examples of such systems—from the construction of European cathedrals in the Middle Ages and temples in Bali today to the present-day care systems for the elderly in Japan and airlines’ frequent-flyer programs. What these systems have in common is that they do not promote competition, but cooperation; they support community instead of undermining it; and they make possible important and valuable work. Lietaer says, “Complementary money systems put us in a position to be ourselves—to literally cash in on our talents. Even when there’s no official financial market for them.” According to him, the possibilities of such systems are virtually unlimited. “I’m not saying reformation of the monetary system will solve all our problems. But I know that money is one of the key functions. There is actually nothing that doesn’t have to do with money. It is an extremely vital element. I am convinced that within a generation we can realize great positive changes.”

Bernard Lietaer discovered the destructive effects of the prevailing monetary system while working in Latin America during the 1970s. “Enormous loans were being granted for senseless projects. The banks were throwing money around. I wondered if I was seeing things other people weren’t seeing.” As a professor of international finance at the University of Leuven in Belgium, he wrote a book about his experiences in which he predicted a major debt crisis. The book came out in 1979. In 1981 the crisis in South America broke loose. Lietaer’s belief that the global monetary system needed reform led him to the Belgian Central Bank, where for several years he was involved in the establishment of the “ECU,” or European Currency Unit, the precursor of the euro. He subsequently became general manager of a foreign-currency fund. His remarkable successes in that capacity attracted international attention. The influential U.S. magazine Business Week proclaimed him the world’s best currency dealer in 1991. Even more than that, Lietaer had become a genuine expert on money, privy to the deepest secrets of the financial world. He decided it was time to write new books. While teaching at the University of California in Berkeley and California’s Sonoma State University, in the 1990s, he worked on The Mystery of Money (Riemann Verlag, 2000) and The Future of Money (Random House UK, 2001). These books unravel the present concept of money and show how different approaches have different social consequences—including environmental and social sustainability.

According to economics textbooks, money is value-free. It is nothing more than a means of exchange and is regarded as having no effect on transactions. Lietaer contests that view. “Money isn’t at all value-free,” he argues. “The monetary system is programmed—albeit not deliberately—to cause certain behaviour. It promotes competition and short-term thinking; it forces economic growth; and it undervalues care, education and tasks crucial to maintaining a society. Economics theory teaches us that people compete for markets and raw materials; I think, in reality, people compete for money.” This competition is a direct consequence of the manner in which money is created. Banks put money into circulation by means of loans. For example, as soon as someone negotiates a 100,000-dollar mortgage, money is created and begins circulating in the economy. But then the bank expects the recipient of the loan to pay back a total of 200,000 dollars in repayment and interest over the next 20 years. But the bank does not create the second 100,000 dollars. The receiver of the loan must get hold of that money—the interest—one way or another, and this forces him or her to compete with others. It’s simple: Some people must lose money or go bankrupt in order to put others in the position to pay off their loans. At the same time, this collection of interest results in a concentration of wealth: Those who have money “automatically” get richer. In addition, the system forces society into an endless loop of economic growth: New money must constantly be put into circulation to pay off old loans. Lietaer says, “My conclusion is that greed and the competitive drive are not inherent human qualities. They are continuously stimulated by the kind of money we use. There is more than enough food and work for everyone. There is merely a scarcity of money.”

A monetary system driven by interest payments also blocks progress toward a sustainable economy. “The environment is a time problem,” Lietaer says. “A company like Shell undoubtedly has a better idea of the next century’s energy needs than any government. But within the current monetary system we cannot entrust Shell with the future. Shell has to make a profit today. A government bears the responsibility for the future of the society.” Business investments today are weighed against interest rates. This continually leads to short-term choices. “It is financially attractive to cut down trees, sell them and put the money in the bank,” Lietaer says. “Through interest, the money in the bank grows faster than the trees. Solar panels, by contrast, require investments that are only earned back over longer periods. The long repayment period makes these investments no match for the growth of money you can put in the bank today to earn interest. “You wouldn’t be able to build a cathedral (see box) within the existing monetary system. Those were investments over decades. And they ultimately had an extremely long-term yield: Eight hundred years later people still go to Chartres every day to see the labyrinth in the cathedral—and those people still make up the majority of the clientele of the city’s merchants.”

Businesses are trying more and more often to avoid expensive, competition-promoting money. Barter now accounts for almost 15 percent of world trade. And it’s increasing every year by 15 percent, while trade conducted with money is growing at just 5 percent annually. Barter is also the basis of the complementary money systems Lietaer advocates as a solution to the social and ecological disruption our current money system causes. The emergence of complementary money systems began 20 years ago in Canada with LETS, Local Exchange Trading Systems. Certain communities issued local currencies that people could use to exchange services. You might, say, repair your neighbour’s car and use the proceeds in local currency to pay someoneto paint your house. More than 5,000 such systems are now operating in communities of between 500 and 5,000 people worldwide. That’s just a drop in the bucket of the international monetary system. Bernard Lietaer, however, sees it differently. “Complementary monetary systems are no longer marginal solutions. It is true that they have no macroeconomic impact, but they have proven that they work and can change people’s behaviour. It’s like with the Wright Brothers when they proved airplanes could fly. They literally fell down and picked themselves back up again, and their constructions were rickety. But it worked, and so they paved the way for serious high-quality planes. This is the pioneering value of the LETS systems, too.”

The next major step for the complementary money systems will involve participation by businesses. “What else are frequent flyer miles besides a currency issued by an airline?” Lietaer asks. “Initially they were mainly meant to commit customers to a certain airline, but over time you could use them to buy groceries in the supermarket, book hotel rooms and pay your phone bill. And you can earn miles without even flying.” Greater involvement by business, Lietaer says, is crucial for a breakthrough of complementary money systems. In the United States, a system is in development in which health insurers will pay customers for healthy behaviour—for example, spending an hour in the gym. People can then use this payment to buy certain things: bicycles, organic food, preventive acupuncture treatments. “This isn’t just marginal messing around,” Lietaer says. “Everyone knows health care in the United States and other Western countries is a big problem that affects millions. Health care devours money. It is a remarkable system: It’s in the system’s interest that people get sick. After all, it can’t earn money otherwise. Healthy people are of no use to the health-care system, or more accurately, medical-care system. A complementary system can work the other way around: For instance, only a century ago in China, doctors were paid by their patients when they were not sick. And he paid them, and took care of them, when they were.”

In Japan, complementary systems have been developed for care of the elderly. People can earn credits by running errands for elderly people or helping them with housework. They can use the credits to buy extra help if they get sick, or send credits to their old mothers. “This is an example of how a complementary system can be used to solve a social problem,” Lietaer notes. “Almost 20 percent of the Japanese population is older than 65, and that percentage is rising. It is unthinkable that the care for this growing population of old people can be paid for under the current social-security system. Japan is solving this with a new complementary currency, which in addition supports the social structures in the country.” In Germany, authorities are collaborating with banks to develop a complementary money system for a million participants. In Brazil, a plan is afoot to finance education for poor families using a complementary currency. Bernard Lietaer enthusiastically offers example after example. “Money is nothing more than an agreement to use something as a means of exchange,” he says. “Money is not a thing. It is an agreement, like a marriage or a business contract. And that means you can always make a new and different agreement.” Lietaer knows money can change the world: “I choose to remain optimistic. I can see how a crisis in the dollar could cause the global economy to collapse. Don’t forget that in the last 25 years almost 90 countries have suffered severe currency crises. But I also know that together we have all the knowledge and means we need for a peaceful evolution. I want to help liberate that creativity. To design money that works for us, instead of us working for it.”

Bernard Lietaer
email : blietaer [at] earthlink [dot] net / bernard.lietaer [at] accessfoundation [dot] org

“…interviewees are Prof. Mitsuya Ichien from Kansai University (author of the most
complete surveys of the early complementary currency systems in Japan), Tsutomo Hotta
(founder of the Fureai Kippu systems), Toshiharu Kato (founder of the eco-money
systems), Eiichi Morino (founder of the WAT currency system), and several dozen local
activists of different grass-root systems in Japan…”

How Businesses Can Save Themselves from the Impact of the Banking Crisis
by Bernard Lietaer / November 4, 2008

Whatever governments do for the banks, credit will be a lot harder to obtain for businesses, for many years to come. The trickiest aspect of the current situation is the simultaneous, global nature, of the banking crisis. The world economy will predictably veer towards a simultaneous recession, which in turn will worsen the banks’ balance sheets, motivating them to further reduce credits, and so on, down a vicious spiral towards either a decade-long recession, or even a possible depression. Please, get ready now for a rough ride for an uncomfortably long time. What all this means in practice is that we have now entered the period of an unprecedented convergence of the four planetary megatrends – financial instability, climate change, unemployment and an aging society – that was described in my 2001 book, The Future of Money [1].

There actually exists a very successful precedent on what business can and should do in such an environment, even if it is surprisingly little known. In 1934, sixteen business people gathered in Zurich to create a mutual credit system among themselves, with a currency unit called the WIR, equivalent in value to the Swiss Franc. Instead of borrowing money from the banks to pay each other, businesses give credit directly to each other in that business-to-business (B2B) currency, and those credits are used to buy from other businesses in the system, or partially pay staff. The system still is operational today: last year’s volume of business in the WIR currency was about $2 billion per year and involves 60,000 members, a quarter of all Swiss companies. A remarkable quantitative study [2] proves that this system is actually the secret for the proverbial robustness of the Swiss economy. WIR expands automatically when there is a recession in Switzerland, and proportionally shrinks back again when there is an economic boom. More information on the current status of the WIR is available on the web.[3] We propose that businesses take the initiative of creating such B2B systems at whatever scale makes sense to them. The big advantage, compared to what happened in Switzerland in 1934, is today’s availability of very cost-effective information technologies that make it possible to implement this approach much more rapidly than in the 1930s.

{Bernard Lietaer has been active in the domain of money systems for a period of 30 years in an unusual variety of functions. While at the Central Bank in Belgium he co-designed and implemented the convergence mechanism (ECU) to the single European currency system. During that period, he also served as President of Belgium’s Electronic Payment System. His consulting experience in monetary issues on four continents ranges from multinational corporations to developing countries. More information on the author and some technical papers that provide the theoretical and practical backing for this proposal are available on}

1 Lietaer, Bernard: The Future of Money: Creating new Wealth, Work and a Wiser World (London: Random House/Century, 2001).
2 Stodder, James: “Reciprocal Exchange Networks: Implications for Macroeconomic Stability”. Albuquerque, New Mexico: Paper presented at the International Electronic and Electrical Engineering
(IEEE) Engineering Management Society (EMS) August 2000,
3 and

“Earthly goods and wealth belonged to the empire. Inca people gave the empire taxes in the form of goods and labor. There was apparently no Inca money as we know it, but much of the commerce was done through a barter system. When there were famines and droughts, the empire’s vast storage areas could provide for everyone.”

“According to Ferreira and Chamot “The social system of the Incas had an ancient Andean origin based on the ayllu, an extended family group with a common ancestor. The economic system was also based on ancient social structures and can be explained through several principles, namely reciprocity, redistribution, and vertical control.” These authors also add: “Redistribution , a practice employed by the state, ensured that all agricultural goods not exchanged by reciprocity were to be distributed in the different areas of the empire in the case of bad crops.”In essence, the government of the Inca functioned as a safe guard against mass starvation.”

“A brilliantly clear-sighted analysis of how on-going money innovations in dozens of countries around the world are proving that they can resolve key societal problems such as: jobless growth, community breakdown, the economic consequences of an aging society, the conflict between short-term financial thinking and long-term sustainability, and monetary instability itself. This book provides pragmatic solutions to each one of these issues. The debate it will create will be a contentious and passionate one. Lietaer starting point is that money is only an agreement within a community to use something as a medium of exchange. This agreement is being placed under an unprecedented strain, due to a wide range of factors (from the creation of cybermoney and currency speculation to social and political issues). This momentum of change could become even faster, and the effects more brutal, if the instability of the monetary system continues to spread. And the indications are that it will. The global monetary crises of the 1990s (Mexico, Russia, Asia and Brazil) proved that our money system is now sick, and that this affects everything. After all, money plays the role of modern society’s central information system – equivalent to the nervous system in our own bodies. In order to prevent a global monetary meltdown, a unique vision of sustainable abundance, and the mechanisms for achieving this, is proposed.
{London: Random House Press Release, 27/10/1999}

Creating New Wealth, Work, and a Wiser World
by Bernard Lietaer / January 2001

Your money’s value is determined by a global casino of unprecedented proportions: $2 trillion are traded per day in foreign exchange markets, 100 times more than the trading volume of all the stockmarkets of the world combined. Only 2% of these foreign exchange transactions relate to the “real” economy reflecting movements of real goods and services in the world, and 98% are purely speculative. This global casino is triggering the foreign exchange crises which shook Mexico in 1994-5, Asia in 1997 and Russia in 1998. These emergencies are the dislocation symptoms of the old Industrial Age money system. Unless some precautions are taken soon, there is at least a 50-50 chance that the next five to ten years will see a global money meltdown, the only plausible way for a global depression.

The Information Age has already spawned new kinds of currencies: frequent flyer miles are evolving toward a “corporate scrip” (a private currency issued by a corporation) for the traveling elite; a giant corporation you never heard of is issuing its own “Netmarket Cash” for Internet commerce; even Alan Greenspan, Chairman of the Federal Reserve, foresees “new private currency markets in the 21st century.” Exorbitant compensations are paid to the very few at the top: it started with movie stars and sports heroes, and has now spread to top lawyers, traders, doctors, and business leaders. In the 1960’s CEO’s salaries were only thirty times greater than those of the average worker, compared with two hundred times today. Is this the dawn of a society where “Winner-takes-all” or a short-term last gasp of the transition out of the Industrial Age?

1,900 local communities in the world, including over a hundred in the US, are now issuing their own currency, independently from the national money system. Some communities, like in Ithaca, New York, issue paper currency; others in Canada, Australia, the UK or France issue complementary electronic money. The value of barter transactions — exchanges which do not use any money as medium of exchange – totaled almost $6.5 billion in 1994 in the US and Canada, and is increasing three times faster than normal exchanges. The magazine “Barter News” covers the industry’s development and now has 30,000 subscribers. It estimates the total barter worldwide at $650 billion in 1997, and growing at an annual rate of 15%.

All of the above is part of an irreversible process of change in our money system and our societies. We are now in a transition period, an interval of great risk but also of great opportunity. The risks are not only financial, some of the emerging money technologies could create a society more repressive than anyone of us thought possible. More importantly major opportunities are also becoming available: now more than ever it has become possible to address some of the most critical issues of our times, such as enabling more meaningful work, fostering cooperation and community, even realigning long-term sustainability with financial interests. None of this is theory, real-life implementations have pragmatically demonstrated such results. Combining these innovations can make available a world of Sustainable Abundance within one generation.

Specifically in Europe, the traditional ways to handle unemployment are increasingly failing. In areas with high unemployment, people have already demonstrated that living conditions can be significantly improved by creating their own complementary currencies instead of just relying on welfare. Surprisingly, it is in fact not the first time that such solutions have been successfully implemented in the Modern world. During the 1930’s many thousands of such initiatives were operational in the US, Canada, Western Europe and other areas affected by the Depression. Complementary currencies could become a key tool to buffer a region from the shocks caused by failures and crises in the official money system. Finally, this approach is a win/win for both locally owned businesses and society at large.

The degradation of the environment due to short-term financial priorities can similarly be addressed with pragmatic money innovations. Short-term thinking is shown not to be due to human nature, but to the prevailing money system. It is also possible to reverse this process, by using a currency designed specifically for multinational trade and contracts which would make long-term thinking a spontaneous process, focusing the attention on long-term sustainable solutions without the need for regulations or taxation. Historical precedents have proven such results, some of them lasting over several centuries.”

Complimentary Currencies for Social Change
An Interview with Bernard Lietaer
by Ravi Dykema /  August 2003

What is money? And how well does it work to solve society’s ills? Bernard Lietaer, author of the upcoming book Access to Human Wealth: Money beyond Greed and Scarcity (Access Books, 2003), has made a life’s work of exploring these questions. Lietaer has been involved in the world of money systems for more than 25 years, and his experience in monetary matters ranges from multinational corporations to developing countries. He co-designed and implemented the convergence mechanism to the single European currency system (the Euro), and served as president of the Electronic Payment System in his native Belgium. He also co-founded one of the largest and most successful currency funds.

Lietaer is the author of nine books on money and finances, including The Future of Money (Random House, 2001), The Mystery of Money (Riemann Verlag, 2000) and a book for kids, called The World of Money (Arena Verlag, 2001). Formerly professor of international finance at the University of Louvain, Lietaer is currently a fellow at the Center for Sustainable Resources at the University of California, Berkeley. Beginning this fall, he will be a professor at Naropa University. Here, Lietaer shares his views on the shortcomings of our conventional currency system, the benefits of creating a complementary currency, and ways to effect lasting social change.

RD: You’re very experienced on the world stage with currencies and money-it’s the world you’ve moved in much of your life, right?
BL: Yes, both in the area of conventional money such as the Euro and more recently with less conventional money systems. Below the radar beams of official thought, there has been a resurgence all over the world for the last 15 to 20 years of what I call complementary currencies, currencies that are operating on a smaller scale than the national level, and that can solve social, environmental and education problems.

RD: People think of someone who works with currencies as being a materialist. Yet it sounds as if your interests are towards social change through complementary currencies. How did you come to be interested in this other dimension?
BL: The reason I went to the Central Bank in the first place was to check whether it was possible to improve the conventional money system from within. I had been working for a number of years in South America, and I had seen the damage that the existing money system has created on a huge scale in Latin America.

RD: You thought it was the money system and not just the governments?
BL: It’s a chicken and egg story: unstable currency equals unstable government. There is practically no way today for a developing country to have a reasonable monetary policy within the current rules of the game. Joseph Stiglitz, Nobel laureate in economics and formerly head economist at the World Bank, makes the same claims in his book Globalization and Its Discontents (Penguin, 2002). Whether you fix your currency to the dollar or let it float, you end up with an unmanageable monetary problem, like Brazil, Russia or Argentina have experienced. Eighty-seven countries have gone through a major currency crisis in the last 25 years. Their fiscal policies are imposed by an International Monetary Fund (IMF). I am afraid that if the United States had to live by the rules that are imposed on, say, Brazil, the United States of America would become a developing country in one generation. It’s the system that is currently unstable, unfair and not working. The majority of humanity has gone through a recent monetary crisis at least once already. We’re living here, in America, in an island of perceived stability. And even that is an illusion. We could have a run on the dollar under the current rules. We are dealing with an unstable system, an ailing system. Back in 1975, I had come to the conclusion that there would be a systemic series of monetary crashes, starting with Latin America. And that’s why I wrote my book on how the money system was not working and its impact on Latin American development, Europe, Latin America and the Multinationals (Praeger, 1979). I predicted that the first crash in Latin America would be in the early 1980s. It actually happened in 1981 in Mexico. Since then we have had more than 80 other countries undergoing similar monetary crises.

RD: So someone’s not connecting the dots-or are they?
BL: Let me put it this way. The powers that be have no interest in connecting the dots. If a new international monetary meeting like Breton Woods were held, the first point on the agenda would be the role of the dollar. So the United States has no interest in such a meeting. The dollar is in a very privileged position.

RD: But it would be anyway, wouldn’t it, because we’re a dominant economic player?
BL: I don’t want to spend a lot of time and energy attacking the existing system. It is an obvious fact that America is the sole super power. But when people say, “Well, there are fiscal crises in other countries because the governments are less stable,” my question is, “How long would any government last in a country if you had to repeatedly cut back on education programs, social programs, building roads and all other programs?” How could that make a stable democratic government possible? Like I said, it’s a chicken and an egg sequence. There is no way of winning in the current monetary game, particularly for the less developed countries. It’s not accidental that investments in the Third World have dropped proportionally by a third since 1975. Currently, investments happen mainly between developed countries, and that trend isn’t going to create a sustainable world anytime soon.

RD: So the Third World is just being abandoned?
BL: Yes. Entire continents. Africa for instance has been dropped off the world economic map for most practical purposes.

RD: And re-envisioning and re-engineering money itself could change this?
BL: Correct. And the good news is that such re-engineering of money has started to happen if one knows where to look.

RD: Do a lot of other people share your views?
BL: Most people haven’t looked at what’s happening in monetary innovations today. What do you think a frequent flyer mile is, but a currency issued by an airline? In Britain, you can go to J. Sainsbury, the largest supermarket chain, and use British Airway miles to buy your goods. Initially, it was only designed as a loyalty scheme for people taking planes. Today, you can earn this currency without ever taking a plane. On Visa cards you get miles. And you can use them to pay long-distance telephone calls, taxis, restaurants, hotels. First, let’s define what a currency is, because most textbooks don’t teach what money is. They only explain its functions, that is, what money does. I define money, or currency, as an agreement within a community to use something as a medium of exchange. It’s therefore not a thing, it’s only an agreement-like a marriage, like a political party, like a business deal. And most of the time, it’s done unconsciously. Nobody’s polled about whether you want to use dollars. We’re living in this money world like fish in water, taking it completely for granted. Now the point is: there are many new agreements being made within communities as to the kind of medium of exchange they are willing to accept. As I said, in Britain, you can use frequent flier miles as currency. It’s not a universal currency, it’s not legal tender, but you can go to the supermarket and buy stuff. And in the United States, it’s just a question of time before privately issued currencies will be used to make purchases. Even Alan Greenspan, the governor of the Federal Reserve and the official guardian of the conventional money system, says, “We will see a return of private currencies in the 21st century.”

RD: In other words, private currencies are coming back. How would that change the circumstances for poor people, for the Third World?
BL: I gave you that first example-a commercial loyalty currency-only because it would be familiar to most of your readers. But in addition to those commercial private currencies, there are now more than 4,000 communities around the world that have started their own currency for social purposes as well. For example, there are about 300 or 400 private currency systems in Japan to pay for any care for the elderly that isn’t covered by the national health insurance. They are called “fureai kippu” (caring relationship tickets). Here’s how they work: let’s say that on my street lives an elderly gentleman who is handicapped and cannot go shopping for himself. I do the shopping for him. I help him with food preparation. I help him with the ritual bath, which is very important in Japan. For this help, I get credits. I put those credits in a savings account, and when I’m sick, I can have other people provide such services for me. Or I can electronically send my credits to my mother, who lives on the other side of the country, and somebody takes care of her. Here is an agreement within a community to use as medium of payment something other than national currencies, to solve a social problem. And it makes it possible for hundreds of thousands of people to stay in their homes much longer than they otherwise could. Otherwise, you’d have to put most of these people into a home for seniors, which costs an arm and a leg to society, and they’re unhappy there. So nobody’s winning. In contrast, Japan has created a currency for elderly care. In the United States, Florida is the only state that has the same density of elderly people as Japan does-18 percent of the population is more than 65 years old. But Florida is a model for our collective future. Colorado will be there in 2020. Germany will be there in 2006, France in 2008, Britain in 2012. Partly because of the baby boom generation, and partly because of the fact that health care has improved and people live longer. If you put all of these elderly in homes for seniors, you’d go bankrupt. Japan has been looking for another way, and has found it by introducing a monetary innovation. Let me give you other examples, already operational here in America today. There are now several hundred “time dollar” operational systems in the United States. The unit of account is the hour. I do something for you. I have a credit for an hour, while you have a debit for an hour. If I can use my credit with someone else, this creates a currency between us. For those people who are willing to give some of their time, the money manifests automatically. It doesn’t quite work that way with dollars, does it? One of the two of us has to get dollars by competing for them somewhere outside of our community. Time dollars are helping in a lot of communities where conventional money is scarce: in ghettos, retirement communities, high unemployment zones, student communities. There are 31 states in America that are paying employees to start such time dollar systems, because it solves social problems. There are some operating in Chicago, fairly big ones in Florida. For example, in Chicago, there are entire neighborhoods that used time dollar systems to create a neighborhood watch system that got rid of drugs and gangs. It’s working, it doesn’t cost anything to the taxpayer, it doesn’t create a huge bureaucracy, and it encourages the solution of the local problems by and with the very people who know most about them.

RD: What do they use their time-dollar credits for?
BL: Well, it’s a closed circle. If I do something for you, I have a credit, which I can use with any member of the community that is part of the system. I can’t buy cars or pay my telephone bill with this system because the suppliers of such items don’t participate now in such systems; but I can obtain services-so I could have my car repaired, my house painted, my kids mentored. The inventor of the time dollar system is Edgar Cahn, who’s the author of No More Throw-Away People (Essential Works Ltd, 2000). He claims that if you can’t compete in the dollar economy, you’re thrown away. He shows how a time dollars system provides a solution to this process, because it operates in parallel with the conventional competitive economy, and it creates an environment where everybody can contribute.

RD: So you envision a world where there are a lot of these alternative currencies?
BL: I don’t call them alternative, because they aren’t intending to abolish or replace the national currency. I’m not claiming that we could or should abandon national currencies or the competitive economy. This is a complementary currency system. It facilitates exchanges additional to the normal system. It makes it possible to match unmet needs with unused resources.

RD: I can’t see how you’d be able to pay your rent with that.
BL: Well, in Ithaca, New York, there is a currency called Ithaca hours, and some people pay part of their rent with it. Not all of it: for some it is 50/50, for others it is 80/20. And the landlord or lady can go to the farmer’s market and buy his vegetables and his eggs.

RD: So the big things-transportation, housing, food-are those covered in the concept of complementary currency?
BL: It all depends on the agreement you’re making, and whom you are succeeding in including in that agreement. Let me give you a real-life example. In Curitiba, the capital city of the State of Paran in Brazil, if you bring pre-sorted garbage, you are given bus tokens. So in Curitiba, public transport is clearly part of their complementary currency system. It depends on the agreements you have with your landlord, with the transportation company, with the university, with the business community. It just depends on who wants or is willing to participate. You can’t force anybody to accept this currency. They are not what is technically called “legal tender.” I call them “common tender”: commonly accepted as payment for debts without coercion of legal means.

RD: I understand that the government wants to get its chunk out of barter transactions, just as if they were a cash transaction.
BL: Yes, and those taxes will need to be paid in “legal tender”, i.e. dollars. The tax issue has nothing to do with the currency you use in an exchange, but with the kind of transaction you’re performing. Say I’m a plumber. I come to your house and fix the plumbing. And you give me a nice cake in payment. I’m supposed to declare the value of that cake and pay taxes on it, because I’m in the plumbing business. Now say I am a professor at a university. I come to your house. I fix your faucet. You give me a $100 bill. I’m not obliged to declare it because I’m not in the plumbing business. As I said: it is not the currency used that determines whether a transaction is taxable or not, but the nature of that transaction. Interestingly, there is one complementary currency, the time-dollar system that we talked about earlier, that is officially tax-free in the United States. It’s used only to resolve social problems, and the IRS has ruled that time-dollar systems are tax-free.

RD: I think complementary currencies, barter included, should be tax-free, because they offer solutions to a social problem.
BL: Then I suggest you go and lobby for passing such a law. Currently that’s not what the law says in the United States. The use of complementary currencies is fairly recent. It took off only in the last 15 years. Even in 1990 there were less than one hundred complementary currency systems worldwide. Today there are over 4,000. It’s definitely catching on.

RD: And you would like to see it continue to expand?
BL: I think it is a useful tool to solve a number of our problems. It makes it possible to truly create a more gentle society. I spent last summer in Bali. People are remarkably artistic in that island. Their communities are unusually strong. They have festivals that are totally mind-blowing, and can last a month. They’re having a good time. It’s a comparatively non-violent society. And what I found is that it isn’t a simple coincidence that they have been using a dual currency system for many centuries. All these unusual
characteristics of Bali turn out directly to be nurtured by their dual money system. I am publishing a detailed paper on how this mechanism works in the forthcoming issue of Reflections, the journal of the Society of Organizational Learning at MIT.

RD: How does the money system lead to those outcomes?
BL: Practically all Balinese participate in a dual currency system. The first is the conventional national currency (the Indonesian Rupiah); the second is a time currency where the unit of account is a block of time of approximately three hours. This second currency is created and used within the “banjar”-this is a community entity consisting of between 50 and 500 families. It is in each banjar that the decisions are made democratically to launch any big community project. It could be to put on a festival or build a school. For each project, they always make two complementary budgets: one in the national currency, and one in time. That second currency-called “narayan banjar” (meaning work for the common good of the community)- is created by the people themselves. They don’t have to compete in the outside world to obtain that second currency, and it fosters cooperation between the members of the community. I call it a yin currency-it’s more feminine in nature. And it complements the national currency, which is a competitive currency and therefore of a yang, or masculine, nature. Here’s why it works: poor communities don’t have a lot of national currency, but they tend to have a lot of time. In rich communities, the opposite tends to be the case-people have more national currency, but less time. In either case, each banjar is capable of creating extraordinary events just by budgeting and using more of the kind of currency-national or time-in which they are rich. This balance is a key contribution to the unusually strong community spirit that prevails in Bali. And it’s not just because they’re Hindus. There are almost a billion Hindus in India, and they don’t behave that way. Here is an example of how a currency can make a difference.

RD: We have a strong emotional attachment to money, and we worry about it. So how we relate to money influences who we are and how we think of ourselves.
BL: Yes, you’re right. But it is interesting that societies that are using different kinds of currency have also very different collective emotions concerning money. The generally accepted theory-dating back to Adam Smith-is that money is value neutral. Money is supposed to be just a passive medium of exchange. It supposedly doesn’t affect the kind of transactions we make, or the kind of relations we establish while making those exchanges. But the evidence is now in: this hypothesis turns out to be incorrect. Money is not value neutral. Let’s return to the example of the fureai kippu that I was mentioning earlier, the elderly care currency in Japan. A survey among the elderly asked them what they prefer: the services provided by people who are paid in yen, the national currency; or the services provided by the people paid in fureai kippu. The universal answer: those paid in fureai kippu, “because the relationships are different.” This is one example of evidence that currency is not neutral. Another example: there is typically a reluctance among friends to pay for help provided by using national currency. If a friend is helping you move or paint and you pay him with national currency, it just doesn’t feel right. Interesting isn’t it?

RD: So people feel differently about complementary currencies than national currencies?
BL: Yes, there have been surveys in several countries that prove this to be the case. Conventional currencies are built to create competition, and complementary currencies are built to create cooperation and community, and it’s important to be aware that both can be available to make our exchanges. According to Paul Ray’s (author of The Cultural Creatives, Harmony Books, 2000) study, 83 percent of Americans believe that the top priority should be to re-build community, and yet the kind of currency we use in our transactions is precisely one that eliminates community. The word “community” comes from Latin, “cum munere.” “Munere” is “to give,” and “cum” is “among each other”-so, community means “to give among each other.” In short, it turns out that dollar exchanges tend to be incompatible with a gift economy. Complementary currencies are.

RD: Are you saying that you can’t have community if you’re using dollar exchanges?
BL: I’m saying that exclusive use of a competitive programmed currency in a community tends to be destructive for the community fabric. This isn’t theory. We’ve seen this happen at the tribe level, with the collapses of traditional societies. I’ve seen one happen myself in Peru among the Chipibo in the Amazon. That tribe had been in existence for thousands of years. When they started using the national currency among themselves, the whole community fabric collapsed in five years’ time. The same thing happened here during the 19th century in the Northwestern United States and Canada, in the traditional indigenous societies. The moment they started using white man’s currency among themselves, the community collapsed, the traditional fabric broke down.

RD: Do you think complementary currencies really can transform our planet?
BL: Yes. Bali is a perfect example that long-term use of a dual yin-yang currency system creates a different society. Thirty percent of a Balinese adult’s life happens in the space of the yin, feminine currency, which is the time currency. In contrast, we spend close to 100 percent of our time in the masculine, yang, competitive currency. That 30 percent of time spent on community activities creates another society, where everybody can become an artist, where the community fabric is stronger, where the social safety net is reliable, where abandonment is unknown. It nurtures an extraordinary feeling of trust and a higher quality of life.

RD: And you think this kind of culture and community can exist in other places, with completely different religions and cultures?
BL: The short answer is yes. We have evidence from Japan, Germany, Mexico, Brazil and the United States to show that complementary currencies make a difference in the way people relate to each other.

RD: In a really transformed world, would a community be using multiple complementary currencies as well as the national currency?
BL: Not necessarily. What has started to happen recently is an integration-many of these services that were using highly specialized complementary currencies are beginning to integrate into a single, local social-purpose currency. For example, youngsters who are taking care of the elderly in Japan using their credits in partial payment for tuition at the university, so we’re solving two problems at the same time. It provides an additional way of making things happen that otherwise is not available when national currency is scarce. Remember, complementary currencies simply enable additional matches between unmet needs and unused resources.

RD: Does the internet and electronic transfer systems offer a means for the creation of complementary currencies?
BL: I am convinced that the reason complementary currencies are developing now because of cheap computing. Do you really think American Airlines would have frequent flyer miles if they needed an army of clerks trying to keep track of your miles? I don’t think so. But today anybody with access to a PC can start a currency system. It isn’t a coincidence that about 95 percent of the social purpose complementary currencies are electronic.

RD: So can we buy an off-the-shelf program for creating a currency?
BL: Sure. There are even different freewares already available. One of them is for operating a LETS (Local Exchange Trading System). Another one that is free of charge is to start a time dollar system. We are in the process of incorporating a non-profit foundation in Boulder, the Access Foundation, whose purpose is to provide independent information on all the different complementary currency systems that are available worldwide, and on its website one will be able to download the corresponding softwares. This website ( is planned to be operational early this fall. Currently, our biggest problem with money and currencies is unconsciousness. We are not aware of what we are doing around money. We haven’t really thought about what money does to us-we believe it’s neutral, so it doesn’t matter. But it’s not neutral: it deeply shapes us and our societies. The first thing that has to happen before complementary currency systems can effect real change on a larger scale is a shift in consciousness and awareness.

RD: You mean, we need to be aware of how money works?
BL: Let me ask you this. Have you taken an inventory of the number of days you spend in life getting ready to make money? And when you have money, to manage the money or spend it? But then, think about how many hours you’ve thought about what money is. I suspect not very much. We are spending a huge amount of energy to get something about which we have surprisingly little understanding.

RD: Well, it’s like the rain. It’s something you adapt to.
BL: Yes, except that rain is not man-made. That’s precisely the difference. We’re treating money as if it is God-given, like rain or the number of planets in the solar system. But it isn’t. If you don’t like the quality of rain, there’s not much you can do about it. If you don’t like your money system, maybe you can do something about it. Assume that a Martian lands in Denver on the wrong side of the tracks. He ends up in one of the ghettos and finds that the houses are run down, the kids not taken care of, the elderly in trouble, and the trees dying. He sees all these things, and discovers that there are people and organizations absolutely equipped and ready to solve every one of those problems. So this Martian asks, “What are you waiting for?” The answer: “We’re waiting for money.” “What is money?” the Martian inquires. “It’s an agreement in a community to use something as a medium of exchange.” Don’t you think he may leave the planet believing there is no intelligent life here? The point is: if money is an agreement within the community to use something as a medium of exchange, we can create new agreements, can’t we? That is exactly what people are already doing all over the world. So why don’t we do it here? If we’re waiting for conventional currency to solve all our problems, aren’t we waiting for Godot?

RD: Is this your whole campaign now? Are you through with Belgian Central Banks?
BL: I’m trying to contribute to a consciousness shift regarding money. I believe that by a small change in the money system, we can unleash huge improvements in our social system. It’s the highest leverage point for change in our society, and surprisingly few people are looking at it. If you start a new complementary currency system, it can become self-perpetuating and facilitate additional transactions forever. You know the saying, if you want to feed someone, give him a fish. If you want to really help him, teach him how to fish. This is just a fishing lesson-what you do with it is up to you. You can take big fish or small fish, or you can choose not to fish at all. You decide what issues you want to deal with in your community, and there is a currency system that can help you with it.

Cultural Sustainability in a Globalizing World: the Bali Exception
by Bernard Lietaer (Center for Sustainable Resources, University of California at Berkeley, USA) + Stephen DeMeulenaere (Rural Economic Development Consultant, Indonesia) / Draft – August 2002

Executive Summary
It is generally accepted that massive tourism and a vibrant indigenous culture are mutually exclusive. Bali has so far proven to be an exception to this rule. This article explores a hitherto overlooked socio-economic mechanism behind that exception. It is a dual complementary currency system used for  centuries by highly decentralized and democratic decision-making organizations. The reasons why such a dual currency system is so effective in mobilizing popular cultural creativity is investigated, and its potential applications in areas in the world other than Bali are described.

Defining the Problem
The process is well known, and has been observed all around the world: massive tourism and an authentic and living indigenous culture simply cannot coexist. Increasing numbers of tourists tend to ultimately destroy the exotic culture they came to experience in the first place, as the locals begin increasingly display their culture only for tourist money.  Many major tourist destinations have gone through this process: Italy and Greece during the 19th century when it became part of any gentlemen’s education to make “the tour” of the classical European civilizations (and from where the word “tourism” derives). Mexico, the Caribbean, Hawaii, Tahiti, Fiji and other Pacific Islands are well-known examples of the same process during the 20th century. Since the late 1970s, many studies have reported a systematic conflict between two desirable aims: cultural integrity and economic development through tourism. Most development plans even highlight the need for a formal trade-off in tourism between socio-cultural costs and economic benefits.[1] This built-in conflict can been summarized succinctly as “Tourism and paradise…are incompatible. For as fast as paradises seduce tourists, tourists reduce paradises…Hardly has the last paradise been discovered than everyone converges on it so fast that it quickly becomes a paradise lost.”[2]

Nevertheless, Bali seems to be an exception to this rule, where increasing numbers of tourists have not led to a corresponding destruction of Balinese culture.  This article will describe one key but generally overlooked tool that is systematically used in Bali to achieve that difference.

It is organized in seven sections as follows:
–       The Bali Exception
–       Some Insufficient Reasons proposed for this Exception
–       The Banjar as a key organization structure
–       A double currency (national currency and time currency) as the key implementation tool.
–       How the dual currency system supports cultural sustainability
–       Applicability in Other Areas than Bali
–       Conclusions

The Bali Exception
Almost everybody has heard of Bali as the “Last Paradise”, a reputation dating back to the time when Westerners first discovered it at the end of the 16th century.[3] In counterpoint, every generation during the 20th century has announced the imminent demise of the Balinese’ exceptionally rich traditional cultural heritage.

The first figures published by the Bali Tourist Bureau reported 213 visitors during the year 1924, when the local population was estimated around one million. When in the 1930s the number of visitors reached for the first time thousand per year, travel brochures entitled “Bali: the Enchanted Isle” suggested to visit Bali soon because  “in another ten years, it may be spoiled by that insidious modernism.”[4]  In the 1950s, after the Indonesian independence, the warnings would become more pressing: “This anachronistic relic of the Hindu soul is, after ten centuries, about to lose its exceptional traits. Let us hurry while there is still time, and contemplate it closely before it gives in to the contagion of modern Indonesia.”[5] In 1971 the first “Bali Tourism Development Plan” coolly predicted that by the time its project would be completed in 1985 “the cultural manifestations will probably have disappeared, but Bali can still retain its romantic image as a green and sumptuous garden.”[6] When in 1994, tourism traffic increased to over 2 million for the first time, the forewarning was repeated: “How much more tourism can the island take? …It is now clear that the unbelievably complex social and religious fabric of the Balinese is at last breaking down under the tourist onslaught.”[7] Today well over 4 million tourists[8] visit that small island of 3 million inhabitants, and are still overwhelmed by the vibrant pageantry of the thousands of religious festivals and other cultural events organized every year by the Balinese for the entertainment of the Balinese gods and themselves. Indeed, it still is true today that “at their temple feasts they combine two good purposes, namely to please their gods and amuse themselves. I would even say that these two things are identical with the Balinese.”[9] This is unlike other tourist destination sites – Hawaii, Tahiti or Fiji  – where the indigenous culture has died out to the point where traditional dances for instance, are now organized exclusively for tourists. In contrast, out of the 5,000 dance groups listed with the provincial authorities as performing in Bali, less than 200 are maintained for tourist performances, and the other 4,800 for temple time.[10]

It should be made clear from the outset that we are aware that:
–       Bali or its culture has changed under the pressures of modernization and tourism;
–       And that these millions of tourists have had negative effects on the environmental, social or cultural fabric in Bali.
Several good publications are available that are making an inventory of such damaging impacts.[11]

But what we and many other observers claim is that “tourism has not destroyed Balinese culture”[12] as it did in so many other places. Bali has been able to maintain a specifically Balinese social, cultural and religious environment against all odds; better than other major tourist destinations. In 1936, Margaret Mead in her first letter from Bali noted that “Bali seems to have learned through a couple of thousand years of foreign influences just how to use and how to ignore those influences. Accustomed to an alien aristocracy, accustomed to successive waves of Hinduism, Buddhism, and so on, they let what is alien flow over their heads.”[13] Fifty years later, this point is still valid: “Beset by invaders for millenniums, the Balinese are responding to the latest incursions as they have to past incursions, by becoming more like themselves. The fabric of Balinese society is too strong and too flexible to be rent by easy money.”[14] Another informed observer concluded that the difference is that in Bali: “The newly available consumer goods have not dethroned ceremonial expenses as a source of prestige and sign of status: the money earned from tourism feeds a competition for status that is expressed in the staging of ever more sumptuous and spectacular ceremonies – much to the delight of the tourists.”[15] This article will explore through what mechanism Bali has been able to achieve that result.

Some Insufficient Reasons
Some claim that that the Balinese exception is simply due to the fact that Balinese are somehow inherently and mysteriously different. “Bali will always be Bali. In the past, a hundred years ago, today, and even a hundred years from now…Tourism is for Bali, not Bali for tourism.”[16] Others see the religion (mainly Hinduism), the complex caste system, or racial characteristics as the explanation of that difference. Others still claim that the management of the complex irrigation systems for the rice agriculture imposes strong cooperation among all its users, thereby creating a strong social fabric at the local level.

Without denying that all these reasons can and do indeed play a role in the Bali exception, we feel that by themselves, none of them are really convincing because none of them – or even their combination – are really unique to Bali. After all, there are hundreds of millions of Hindus around the world where a similar caste system prevails; and they have not exhibited the same level of cultural resilience and creativity as the Balinese. Similarly, Bali shares with other parts of Asia a complex racial composition resulting over several millennia from successive invasions of Austronesian, Indic, Malay, Javanese and other ethnicities; as well as its irrigation and rice agriculture. Even the historical familiarity with foreign or colonial rulers, first noted by Mead, is clearly not unique to Bali.

So, is there a systemic explanation for the Bali exception? To find out, the authors made during the Summer of 2002 a series of interviews – conducted mostly in Bahasa Indonesia – with local traditional Balinese leaders. The geographical focus was on the area of and around Ubud, generally considered as the “cultural capital” of Bali, because the interface between the indigenous culture and tourism is particularly intense in that region.

On the basis of this research, we propose that the key towards Bali’s exceptional cultural resilience results from a combination of two key traditional tools generally used all over Bali: the first consists of specific local organization structures, and the second of a dual currency system systematically used by those organization structures. The organization structures are well-known from the anthropological literature: the Banjar social organization, and a less formal structure called the Sekhe (pronounced say-keuh). But the key role of the dual currency system used by both those structures has tended to be overlooked until now.  Both will be explained next.

The Banjar and the Sekhe Structures
The Banjar is the fundamental civil unit in Bali, operating in a decentralized, democratic, cooperative manner at the local level. Banjars are typically geographically bounded on one side by a major road, on two sides by secondary roads and on the end by a river, which irrigates the Banjar’s rice fields and forest which supplies food and raw materials for the many ceremonies held each year. In a small village, there is often only one Banjar; in larger towns, there may be several. In Ubud for instance, there are four Banjars in the town itself, and 9 additional ones in the immediately surrounding villages.

The Banjar structure having been amply described in the anthropological literature[17], we can be brief here. It has been succinctly defined a “residential entity whose responsibilities are at once legal, fiscal and ritual.”[18] This paper will focus particularly on its socio-economic and cultural functions.

The Banjar head, the Klian Banjar, is elected by a majority vote of the members, and “is more an agent than a ruler”[19]. He can also be dismissed at a members’ meeting by majority vote. He receives no remuneration for this function.  Each member is equal and has one vote, there is no special status granted to wealthier members of the Banjar.  Each thirty-five-day Balinese month on the average, the Kulkul bell (a wooden gong) summons the council members to the dedicated meeting place, the Bale Banjar, to decide on the next month’s activities. Special meetings can also be convened whenever necessary.

At such meetings, both new activities are proposed and on-going projects are reported on. At the same time, the contributions of time and money are decided upon for each project.  However, if a majority of members becomes opposed to a particular project for whatever reason, it is revisited at the next monthly meeting to discuss whether or not to continue with it.

In the Ubud area each Banjar has between 750 and 1200 members, who are represented at the council by the 150 to 260 male heads of each household. The four Banjar of Ubud itself have recently agreed on a single written rule book, Awig-awig, which defines the operation of the Banjar. But notwithstanding this common rule book, each Banjar tends to keep its own style and focus depending on its leadership and the socio-economic background of its members.

In the less formal structures of the Balinese countryside, the main Banjar rules are part of the adat, the traditional code of conduct. And although the overall system is very similar all over Bali, lots of small local variations in rules can be observed.

The Sekhe (literally: “to make one”) is less formal and less permanent than the Banjar. It could be defined as a “Balinese activity club”. For example, most traditional orchestras (gamelan) or dance groups take that form. Some are formally created by a Banjar council and involve members of only that specific Banjar; many result from individual initiative and include members from various neighboring Banjars. A few evolve into successful for-profit cooperative ventures (like the 200 dance groups that perform for tourists). Many in the Ubud area focus on the development of the arts (like the Sekhe initiative by a young member of the Banjar Tengah involving now 57 members from 4 different Banjars to resurrect in Ubud the almost lost tradition of bamboo gamelan). The objective of most is to have a lot of fun (like the ones created to build huge kites in the windy season, sometimes running in the yearly kite competitions)[20].   All Sekhe stand or fail on their own merits and leadership, and on their capacity to attract the enthusiasm of other participants.

What Sekhe has in common with Banjar is that they are both part of the traditional social system (‘adat’), and are widely used all over Bali: there are more than 3,000 Banjars operational in Bali, and an unrecorded multiple of that number in Sekhe. But most importantly, both use the dual currency system described next.

An Overlooked Tool: a Dual Currency System
In our meetings with the local Balinese leaders, we were repeatedly told that it is not something special about the Balinese or Hindu religion itself, but the strong system of mutual cooperation, the Banjar, that has maintained Balinese culture despite the large and increasing numbers of tourists coming to the area.

Some quotes:
– “Banjar is stronger than religion in keeping community and culture together.” Pak Agung Putra, Klian Banjar Tengah.
-“Banjar is what holds the community, each other, together.” Pak Ketut Suartana, Klian Banjar Sambahan.
– Banjar is the most fundamental organization that keeps the Balinese character intact.” Pak Wayan Suwecha, Klian Banjar Kelod.

But what holds the Banjar together?
The intriguing answer is that a key element, usually overlooked, is a dual currency system, which gives both the Banjar and the Sekhe structures an exceptionally flexible capability to mobilize local resources. The first of these two currencies is the Rupiah, the conventional national Indonesian currency. The second one is Time. A unit of Time is approximately 3 hours of work in the morning, afternoon or evening; and the kulkul gives a special summoning for people to gather when joint work is called for.

On the average, each banjar starts between seven and ten different projects every month, big and small. And for each project, the expected contributions of each family unit – in Rupiah and in time – are taken into account. In the poorer banjars, the Rupiah constraint is typically the more binding, while in the richer ones the opposite may happen.

In most cases, there is no problem finding enough people to contribute the time needed to complete an activity, and thus contributions of Time are not recorded.  In some Banjars, however, where there is a scarcity in the contribution of Time or when there are complaints from some members about the lack of contribution by others, the Klian Banjar records every contribution of Time. Those who cannot contribute their share of Time are asked to either send a substitute person, or to pay in Rupiah at an amount of between 5,000 and 10,000 Rupiah (.50 to 1.00 US Dollar) for each time block missed.  The more organized Banjars in Ubud like Banjar Sambahan make the amount of Rupiah of such substitution cost a formal decision at the initiation of each project – when it is felt that everybody’s physical presence is deemed important the substitution cost is higher than for other projects where that is less the case.

Western observers may have missed the importance of this dual currency system because they themselves come from a culture where a monopoly of national money is taken for granted. Even the remarkably insightful historical analysis of Clifford Geertz[21] seems to have missed the role of the Time currency in shaping and maintaining the local social fabric so strong in Bali in the past centuries as well.

But our interviewees themselves are quite clear about this: “Time is a form of money.” The majority even make the point that “Time is more important than Rupiah” for keeping the community strong in the banjar.

The importance of these time exchanges can also be expressed on the negative side: the main form of punishment meted out by the banjar is not a Rupiah fine, but ostracism, the exclusion from the banjar of someone who refuses three times in a row to respect the community decisions. “The Balinese still say today that to leave the Banjar council (krama) is to lie down and die.”[22] And the reason given why such ostracism is so serious is “when they have an important family ceremony, like a cremation, then nobody will give Time for helping them in the preparations.” In short, depriving someone of Time from the community is considered the ultimate retribution.

But why is such a dual currency system so important to keep community spirit and their collective cultural expressions strong?
How a Dual Currency Supports Cultural Sustainability
A Banjar leader with a more philosophical inclination described the dual currency system as being in Yin-Yang relationship, referring to the Taoist concept of complementarity.  One of these currencies, the normal Indonesian national currency in this view is of a Yang nature because it cannot be created within the community but has to be earned  by competing in the outside world. The other – Time that everybody in principle has as the same birthright – is Yin because it is generated within the community, on an egalitarian basis, and generates cooperation. It is also something that you can’t accumulate and store like conventional money: use it or lose it.

Western languages do not have words describing the Yin-Yang concept, so we will have to use the Oriental word for it. Taoism conceived all forces in complementary pairs like earth-heaven, water-fire, exhaling-inhaling, pushing-pulling, etc. Although obviously separate forces, they are really seen as parts of a single ultimate unity, and therefore necessary to each other. In the specific money and societal context of this paper, the Yin-Yang notion refers to the polarities of cooperation-competition, egalitarian-hierarchical, feminine-masculine, etc. Figure 2 provides a summary of some of these complementary aspects. It includes some of the philosophical aspects that are underlying this worldview, because they are coherent with other important aspects of the Balinese culture. For instance, to a Balinese, the Divine is not only transcendent but also immanent – present everywhere in everything – not just in the temple compound or invisible in the heavens.

This figure can be read from up to down to focus on the internal coherence of each philosophical framework; or horizontally to see the polarity between the different worldviews. What is important to realize is that from a Balinese perspective both views are equally valid, and they spontaneously developed a dual currency system that supports both worldviews.[23] This figure also highlights therefore the differences with our Modern Western culture, where a monopoly of a Yang currency and a Yang coherence has long been considered self-evident.

An interesting difference in attitude can also be observed towards the two currencies: specifically a very flexible Yin attitude prevails towards the Yin currency. If, for example, someone has a sick child that interferes with providing time, nobody will object to him or her not contributing an equal share in time commitments. What matters is the good will underlying one’s actions…

One can see why such a dual currency system within a democratic structure like the banjar provides a lot more flexibility than when on has to operate within only one currency system as is the case in most other parts of the world, including the “developed” ones. People who have a lot of conventional money tend to have little time, and people with little money tend to have more time. So the dual currency mechanism enables some automatic leveling among the social classes.

Furthermore, this dual currency system provides more flexibility in the choice of projects that get approved by the council. In poorer communities projects that require a lot of time are favored by the banjar; and in rich ones the more expensive Rupiah projects tend to pass. For example, we found one single project in a rich banjar that had a Rupiah budget of 1.2 Billion (equivalent to 1.2 million US$). But even the poorest banjar we interviewed has a large group performing at their temple a great kecak dance, which requires a lot of manpower but no expensive garments or props. In short, in both cases, a lot of local resources can get mobilized to meet whatever the community chooses to focus on. And in all cases, a mixture of Rupiah money and Time money are always involved, just the proportional mix tends to vary. This explains why, in Bali, large-scale religious or cultural events involve practically everybody, and are not limited to elitist social groups as tends to be the case elsewhere. This dual currency system may therefore be the real secret for the cultural resilience of Balinese society.

Note that this system goes also beyond cultural events. We found banjars who support their primary schools or even build themselves roads, when the central government isn’t responsive to their demands. There are of course limitations to the substitutability of the two currencies: the cement or other materials needed for such works remains part of the Rupiah budgets.

Applicability in Areas Other than Bali
Community associations that bring people together to plan, budget and implement projects in a fully democratic and participatory way are certainly not specific to Bali. What is more rare, however, is the use by such grass-root structures of a Yin complementary currency, Time, which operates in parallel to the normal cash economy.  We believe that it is the marriage of these two concepts, the highly decentralized democratic structure of the Banjar and its use of a dual complementary currency that has enabled and continues to enable the Balinese culture to withstand the external pressures that otherwise would obliterate its rich cultural heritage.

While the combination of a decentralized democratic organization structure and the use of Yin currency is rare, it is not totally unique to Bali, however. One of the authors has recently completed the first major study for the Provincial Government of East New Britain in Papua New Guinea on the contemporary uses of the traditional shell money[24]. The key conclusion was that the use of shell money, issued locally through an organization of families, also there maintains a stronger local economy, culture and society particularly in times of downturn in the national economy.

We can therefore argue that such an approach critically contributes in maintaining the local economy, culture and society particularly whenever external forces are threatening them. By making use of a Yin complementary currency in the context of a traditional society the culture is continually nurtured, even while the people pursue market-oriented activities. It helps avoiding the degradation that normally occurs once the traditional culture is abandoned, or worse, sold off for tourist consumption in the pursuit of these commercial activities.

It is intriguing that there are many places where either one of these concepts separately are currently operational – decentralized democratic organizations, or complementary currencies. It is only their combination that remains comparatively rare.

Highly decentralized cooperative and democratic institutions are very common in many countries, including many of the local NGO’s for example.

On the complementary currency side, the use of non-conventional currencies has been spreading worldwide over the past decades. There are many traditional forms of exchange functioning throughout the Third World[25], and more surprisingly in the last decade we have seen similar activities develop exponentially throughout the First World. While there were less than a hundred such modern systems operational in the world in 1990, today there are well over 4,000.[26]  For instance, Local Exchange Trading Systems (LETS), Time Dollars and Time Banks use different forms of Yin complementary currencies. In Japan the federal government has been supporting pilot projects throughout the country to facilitate the rebuilding of community and local social capital, and the caring of one for another. Several of these exchanges make use of smart cards that process the Yin-type complementary currency.

The Balinese case study reveals that the potential for local democratically representative organizations to mobilize their membership with complementary currency systems could be quite substantial. One key ingredient would be that the membership truly and democratically participates in the selection of the projects for which their time and money would be used. Otherwise, the legitimacy of the projects would quickly be questioned. The resilience of the Balinese approach derives clearly from genuine grass-root support for every activity that the community has decided upon, and the possibility to stop any project whenever a majority in the community starts questioning it.

We obviously do not claim that dual currency systems are a panacea to solve all problems, social, cultural or otherwise. But by embedding culture and society within the economy and ecology of an area, through community associations using a Yin complementary currency, we see the possibility to get one step closer to Karl Polanyi’s vision of an economy that functions in harmony with the culture, society and environment of the area.[27]  This has been picked up by contemporary economists[28] to be called the “New Traditional Economy”, which maintains culture and society while allowing people the freedom to pursue market-oriented activities.

Most existing economic theory has as hidden hypothesis that all exchanges need to be facilitated through a monopoly of a centrally controlled currency. Furthermore, it is assumed that any currency used is implicitly value-neutral: it is supposed not to affect the transactions or the relationships among the people using it. As the English put it: “A fact is a fact, and is more respectable than the Lord Mayor of London.” And the Balinese exception provides enough facts – historical and contemporary – that should force us to put a big question mark behind both those implicit assumptions of conventional economic theory.

It is a fact that many transactions and additional activities occur in Bali thanks to the existence of the complementary Time currency systematically used at the local level. This Time currency doesn’t replace the national currency, but operates as a complement to it, and makes possible a strong involvement of even the poorest communities in the rich cultural activities of the island. The Balinese themselves claim that its existence plays a key role in creating the proverbially “strong community fabric” evidenced in their island.

Nobody is saying that community currencies all by themselves are a panacea for third world poverty and cultural degradation. A complex web of interrelated but independent, decentralized but united groups holds the Balinese society together.  But at the core of this network lives the Banjar and the Sekhe, and their dual currency system.

In a large-scale survey of the American public, no less than 83% considered that the top priority in the US should be to “rebuild community”.[29] This suggests that the automatic assumption that the dollar is the only monetary tool relevant to solve all problems, especially those of a community nature, may need to be questioned, even in the US.

Finally, one of the most frequent complaints about globalization has been that it entails an erosion of cultural specificities around the world. A  dual currency system could be of interest to those who want to rebuild a sustainable social fabric or strengthen their cultural diversities in any country, independently of its degree of economic development.

[1] Two specific conferences were the landmarks of these realizations in their respective fields. The systematic conflict between socio-cultural integrity and tourism was the main conclusion from the first conference of the American Anthropological Association devoted to “Tourism and Cultural Change” in 1974. The need for trade-offs between these two variables was the main conclusion of the joint UNESCO/IBRD “Seminar on the Social and Cultural Impacts of Tourism” held in Washington in 1976. See Smith V.L. ed. Hosts and Guests: the Anthropology of Tourism (Philadelphia, University of Pennsylvania Press,  1989);  and Picard  M. Sociétés et Tourisme: Réflexions pour la Recherche et l’Action. Paris: Unesco, 1979).
[2] Iyer, Pico Video Night at Kathmandu and Other Reports from the Not-So-Far-East (New York: Knopf,  1988) pg. 30
[3] The Westerner who first discovered Bali was the Dutchman Cornelius Houtman in 1597. After a long sojourn on the island, several of his crewmembers decided to stay, establishing the reputation back in Holland that a new “paradise” had been found. “The Last Paradise” became the title of the first book in English on Bali, published in 1930 by the American journalist Hickman Powell. See Covarrubias, Miguel Island of Bali (first edition: New York: Knopff, 1937; republished 1998 in Singapore: Periplus).
[4] quoted in Picard, Michel Bali: Cultural Tourism and Touristic Culture (Singapore: Archipelago Press, 1996) pg 37.
[5] Durtain, L. Bali, la fabuleuse et la charmante (Paris: Les Oeuvres Libres, 1956) pg 21.
[6] SCETO:  Bali Tourism Study. Report to the Government of Indonesia (Paris, UNDP/IBRD, 1971) Volume 2, pg 162.
[7] Dalton B.  Bali Handbook (Chico: Moon Publications, 1990) pg 35-36.
[8] Source for data for Figure 1: Directorate General of Tourism and Bali Government Tourism Office. Disconcertingly, there are no exact statistics of the number of tourists visiting Bali, the only firm number being total foreigners arriving directly by international flights. These rose from 23,000 in 1970 to 1,468,000 in 2000. 95% of those direct arrivals report that they come for vacations, and 30% are on a repeat visit. However, this doesn’t capture foreign or Indonesian tourists arriving via Jakarta on internal Indonesian flights, the ferry arrivals or even the cruise ships mooring at Benoa or Padang.  The estimates of total tourism arrivals range therefore between 2.5 and 4 million for 1994; and between 4 and 5 million for 2000. The lower number being the official Tourism Office estimate, it is the one we have been using in our graph.
[9] de Kleen  T. Bali: its dances and customs (Sluyter’s Monthly, 2, 1921) pg 129.
[10] Picard, Michel Bali: Cultural Tourism and Touristic Culture (Singapore: Archipelago Press, 1996) pg 138.
[11] See for example for recent opinions by Balinese themselves: Ramseyer, Urs & I Gusti Raka Panji Tisna Bali Living in Two Worlds: A Critical Self-Portrait. (Basel: Schwabe Verlag, 2000); or by foreigner observers Vickers, A. Bali: A Paradise Created (Berkeley: Periplus Editions, 1989).
[12] Norohna, R. Paradise Reviewed: Tourism in Bali in Tourism: Passport to Development? Perspectives on the Social and Cultural Effects of Tourism in Developing Countries (ed. E. de Kadt. New York: Oxford University Press, 1979) pg 201. See also Cohen E. “Authenticity and Commoditization in Tourism” Annals of Tourism Research 1988, 15/3 pg 371-386; Macnaught T.J. “Mass Tourism and the Dilemmas of Modernization in Pacific Island Communities” Annals of Tourism Research 1982  9/3: pg 359-381; McTaggart W.D. “Tourism and Tradition in Bali” World Development 1980 8 pg 457- 466.
[13] Mead, M. Letters from the field 1925-1977, ed. R.N. Aschen (New York: Harper & Row, 1977) pg 161.
[14] Elegant R. “Seeking the Spirit of Bali: Despite Fast Food and Discos, the Old Ways Live” The New York Times March 8, 1987 Travel Section, pg 9.
[15] Picard, Michel Bali: Cultural Tourism and Touristic Culture (Singapore: Archipelago Press, 1996) pg 64.
[16] Declaration of the Governor of Bali, Ida Bagus Oka, excerpt from Bali: Apa Kata Mereka (Denpasar, 1991) pg. 11
[17] Geertz, C. “Form and variation in Balinese Village Structure” American Anthropologist 1959, Vol 61: pgs  991-1012. Geertz H. & Geertz C. Kinship in Bali (Chicago: University of Chicago Press, 1975). Guermonprez, J.F. “On the Elusive Balinese Village: Hierarchy and Values Versus Political Models” Review of Indonesian and Malaysian Affairs 1990, Vol 24 pg 55-89. Warren, C. Adat and Dinas: Balinese Communities in the Indonesian State (Kuala Lumpur: Oxford University Press, 1993).
[18] Picard , Michel Bali: Cultural Tourism and Touristic Culture (Singapore: Archipelago Press, 1996) pg 12
[19] Geertz C. Negara: the Theater State in Nineteenth Century Bali (Princeton: Princeton University Press, 1980) pg 49.
[20] That fun is the main objective of such competitions is illustrated by the fact that the first prize of the biggest competition in Bali – the  Kite Festival at Padanggalak – amounts to 1.5 million Rupiah; while the Rupiah cost of the kites ranged in 2002 between 5 and 30 million Rupiah. See Wahyoe Boediwardhana “Beautiful kites fluter in Bali’s skies” Jakarta Post (Thursday, August 1, 2002 pg 18)
[21] Geertz, C. Negara: the Theater State in Nineteenth Century Bali (Princeton: Princeton University Press, 1980).
[22] Geertz C. Ibid. pg. 49.
[23] For other historical examples of dual currency systems and their collective psychological impact, see Lietaer, B. Mysterium Geld (Munich: Riemann Verlag,2001) , also available in Japanese with Diamond Press.
[24] DeMeulenaere, S. Week, D. & Stevenson, I. The Standardisation and Mobilisation of the Tabu Traditional Shell Currency (Papua New Guinea: Assaí Study, July 2002) 54 pgs.
[25] For more information about Community Exchange Systems in the Global South, see
[26] A full discussion of such modern systems is available in Lietaer B. The Future of Money (London: Random House, 2001) and on
[27] Polanyi, K. The Great Transformation: the political and economic origins of our time (Boston: Beacon Press, 1944).
[28] Rosser, B. and Rosser, M.  “The New Traditional Economy: A New Perspective for Comparative Economics?” International Journal of Social Economics, 1999; and Comparative Economics in a Transforming World Economy (Chicago: Richard D. Irwin,, 1996).
[29] Ray, P. and Anderson, S. The Cultural Creatives (New York: Harmony Books, 1999). Also, The Integral Culture Survey: A Study of the Emergence of Transformational Value in America (Research Monograph sponsored by the Fetzer Institute and the Institute of Noetic Sciences, 1996).

Community Currencies: a New Tool for the 21st Century
by Bernard A. Lietaer

The three most important concerns of our contemporaries in the developed nations are remarkably convergent–unemployment, the environment, and community breakdown–and there are strong indications that these same issues will remain on top of the agenda well into the next century. Emerging technologies promise to keep unemployment a major issue, even if all Western economies get out of recession. By 2010, China will introduce as much carbon dioxide in the atmosphere as the entire world does today. And community breakdown is one of the most systemic, deep, and complex societal trends of the past 30 years, with no signs of any reversal. Precisely because we will have to live with these issues for the foreseeable future, only a long-term structural approach can successfully resolve these problems. Here I show how community currencies could contribute to tackling all three problems and also permit us to “retrofit” economic motivation to desirable human behavior.

1. Aligning Moral and Economic Incentives
There are three main ways to induce nonspontaneous behavior patterns: moral pressure, coercion, and economic incentives. For example, recycling glass bottles can be promoted by education, by regulations, or by incorporating a refundable deposit in the purchase price. A combination of all three incentives is obviously the most effective strategy. When these incentives conflict, problems will arise. For instance, when there is an economic incentive to do something a regulation or law prohibits, we need costly and permanent enforcement systems. Even in the presence of such enforcement systems we expect smuggling and many more imaginative forms of cheating to occur. More evident are cases where moral pressure is supposed to overrule economic interests. Consider, for instance, the well-known saying, “Money is like manure; it does good only if spread around.” This sentiment has been espoused in less florid language by most religions for a long time. However, this moral pressure is diametrically opposed to the concept of receiving interest on money, which provides a built-in incentive to hoard currency. Whenever there are such structural contradictions many people are unable to afford, or simply do not care enough, to follow the moral advice. It is possible, however, to design a coherent and operational currency system so that this apparent structural contradiction disappears. In other words, by questioning some traditional implicit assumptions, we can realign the moral and economic incentives so that they are in harmony.

2. Functions of Money
To understand community currencies we need to better understand what money does. We will see that a community currency should fulfill at least some of the key roles of any currency, and that a well-designed community currency can even fill some of the roles that the “normal” national currency does not. Since the breakdown in 1972 of the Bretton Woods system, the world has been living with pure fiat currency–that is, there is nothing material backing the currencies of the world. Nonetheless, money has continued to fulfill a number of different functions, only two of which are essential:
-A standard of measure. We compare the value of the proverbial apples and oranges by expressing each of them in dollars, for example.
-A medium of exchange that is more efficient than other forms– barter, for instance.

Money has sometimes played three other roles in the past, and happens to play them today as well:
– A store of value. Historically, this has only rarely been the case. For example the word capital derives from the Latin capus, capitis, which means head, and referred to heads of cattle just as is still done today in Texas or among the Tutsi in Africa: “He is worth 1,000 head.” Another example: in Egypt through the Late Classical period, and in Europe throughout the Middle Ages and until the late 18th Century, wealth was stored mainly in land and its gradual improvements.
– A tool for speculative profit. Most emphatically today when more than 95 percent of all currency transactions in the world are motivated by speculation, and less than 5 percent are for trades of goods and services. This has been systematically possible only since August 1972, when President Nixon created the floating currency nonsystem we now have.
– A tool of empire. The control by the former Soviet Union of the external trade of Comecon countries via the “convertible ruble” is a recent example.

Though we tend to take for granted that money serves all the functions we are used to–which today means all five functions for the U.S. dollar–it is important to realize that money really needs to serve only the two essential functions in order to be an efficient currency.

3. Conflicts Among the Functions of Money
In fact, the secondary functions money serves invariably end up hurting the two essential ones. Some examples follow.

Store of Value Versus Medium of Exchange
At first sight, it really is convenient to have money also play the role of store of value. However, there is a formidable hidden cost: this identity significantly exacerbates the boom-bust economic cycle.

The theory of time preference of money, which describes the rational trade-off between consumption today and saving for the future, explains this: When someone expects higher uncertainty in the future, a larger proportion of his or her wealth is logically kept as savings, and less is thus available for immediate consumption. Therefore, at the first signs of a recession, anybody who has money will logically save more and consume less, thereby exacerbating the recession for everybody else. In boom years, consumer optimism prevails, and people will tend to simultaneously dip into their savings to buy big-ticket items such as cars and houses, thereby pushing the boom into an inflationary period. While other factors also play a role in the creation of business cycles, it has been proven many times that consumer confidence significantly exacerbates the problem. Providing incentives to ensure that the medium of exchange does not also incorporate the store of value function would therefore automatically dampen this boom-bust tendency of the current system.

Speculation Versus Standard of Value
Joel Kurtzman’s ‘The Death of Money’ convincingly describes why and how the speculation on currency undermines currency’s role as a standard of value. If, for example, a German company wants to invest in a plant in India, the biggest uncertainty lies not in the risks of the business itself but in what currency to use to make cash-flow projections: rupees, dollars, or Deutsche Mark? The initial investment is in Deutsche Mark, and the proceeds will be generated in rupees, but at what exchange rate can one match the two to determine the expected rate of return? While there are some tools available to manage this risk for short-term transactions, they often are not available for the long-term risks typical in plant investments, or they are simply too expensive. The net result: fewer cross-border investments, particularly in Third World countries, thereby reducing the worldwide efficiency of resource allocation. We will never be able to determine how many investments have not occurred because of this, but all indications suggest they are quite substantial.

Tool of Empire Versus Medium of Exchange
Recent history provides a telling example of the potential conflict inherent in these two functions of money: Before the collapse of communism, there was no need for anybody to stand guard next to a plant in Poland to ensure that it would not establish closer trade relationships with the West than the Soviet Union felt comfortable with. Having the Comecon currencies convertible only in rubles was an automatic and sufficient guarantee.

4. Problems with Interest
Another feature of today’s money that we take for granted is that money produces interest. This process has become universally accepted in the West only over the past century. Indeed, for more than a thousand years all three major religions emphatically prohibited any interest on money because they considered it usury. It is only since the end of the l9th Century that the Catholic Church, for instance, “forgot” about the sin of usury.(note 2) This happened to coincide with the period when the Church itself, which for centuries used to be the largest landowner in Western Europe (that is, it was a capital user), found itself with financial assets instead of land (that is, it had become a capital supplier).

However, the problem with interest does not relate to any of these “moral” historico-religious reasons. Interest on money constitutes one of the most systematic causes of our destruction of the global environment. Consider as metaphor, for example, the life of a tree (or any other living resource): Because of interest, the net present value of any income far away in the future is negligible. So, it literally pays to cut down a tree and put the proceeds in a savings account instead of letting it grow for another decade or century. Similarly, the only types of tree worth planting commercially are the fastest-growing varieties such as pine. (Nobody plants redwoods for commercial reasons.) So even when we plant trees, we are systematically losing biodiversity.

5. Reprogramming the “Invisible Hand”
Let us assume now that we develop a currency whose sole objective is to fulfill the two main roles of money: standard of value and medium of exchange. To discourage its use as a store of value, we build in a “booster” mechanism: when someone earns the equivalent of $100 in this currency, we give him or her a purchasing power of $110 if the money is used today. It would be worth only $109 tomorrow, $ 108 the day after tomorrow, $100 on the tenth day, and $90 in twenty days, and so on.(note 3) Now, what would happen? The following patterns would become manifest: A structural incentive to separate the functions of medium of exchange and store of value would be achieved, with the advantage of reducing the boom-bust cycle. People would invest or spend this money soon, and those who receive it would in turn do the same. Therefore, additional economic activity would occur, and additional jobs would be created. Decisions would be highly decentralized, given that any recipient of the currency would become actively involved in spreading the currency and thereby activating the job creation process.

The most important structural shifts would occur in the way people would spontaneously start saving and investing. Because the booster concept discourages the use of currency as a saving device– particularly if such currencies are in widespread use– something else needs to be used to store value. The conceptual key to understanding this shift involves changing the “arrow of time” in the investment process. Under the present system, the discounted present value of any investment has to be higher than the interest rate of a risk-free government bond. This implies that anything that produces value more than twenty years in the future is basically worthless today, thus providing a systemic incentive not to care about the long-term consequences of our actions. Under the proposed system, the incentive works in the opposite way: income in the future would become more valuable than income today, thereby automatically prioritizing the long-term implications of today’s actions.

Once the basic necessities of life are covered, the logical uses of money in this new context would include investing in ways that will reduce expenses in the future (pay back mortgages, improve home insulation, improve energy efficiencies, start one’s own food gardens) and investing in anything that will keep, or increase in, value (land improvements, trees and forests, and any- thing else that grows over time). To prepare a nest egg for your grandchildren’s college, one logical step is to plant a small forest or have a “savings account” that invests in such activities. New liquid forms of savings would immediately be offered by the more agile financial institutions as soon as the demand for liquidity in the fixed assets just mentioned increased. This could stem the trend toward disintermediation, because government bonds would yield much lower returns. In general, stocks would be preferred to bonds, thereby making access to investment capital at low leverage the dominant way of financing businesses.

Consumption patterns would evolve toward products with longer lifetimes. Assume that one has $100,000 available and two types of cars are offered for sale: the usual car of today, which costs $20,000 and lasts four years, and one costing $100,000 that lasts twenty years. In today’s currency environment it is logical to buy the short-lived car because one can put the $80,000 balance in a savings account and get more value in the long run. With the proposed alternative currency it is logical to buy the long-lived car. Today nobody builds such a car because there is no demand for it. But in the future, it could spontaneously become the type of car in greatest demand. Note that the total income of the car manufacturer is the same over twenty years (assuming no inflation), but that the burden on the environment is much lower. According to the same logic, people would tend to build houses intended to last forever–and spontaneously invest in further insulation and other improvements whenever they have extra cash.

It is important to recognize that there would be no need to provide tax incentives or otherwise “educate” people to do all these things. We just reprogrammed the “invisible hand” of financial self-interest to provoke these actions. Today, many people try to convince others to act in an ecologically responsible way, but it is in the financial interest to do the opposite. With the proposed system, economic self-interest pulls automatically in the direction of ecologically sound actions. Only by such realignment of economic and moral motivations can we expect truly massive changes in behavior patterns.

6. The Validity of “Booster” Currency
The idea of a “booster” currency is just a variation of what has been variously described in the Anglo-Saxon literature as “stamp scrip” or “stamp currency” and in the German literature by “Wara” (merchandise currency) or “Frei Geld” (free money). Its theoretical concept was originally developed by Silvio Gesell about a century ago. Gesell was an Argentine businessman and economist who has been neglected by many theoretical economists because of the–at first sight–unconventional nature of his “charge” or “demurrage” concept. Gesell’s initial premise was that money as a medium of exchange should be considered a public service good (just as public transportation, for instance) and, therefore, that a small user fee should be levied on it. Instead of receiving interest for retaining such a currency, the bearer in fact pays interest. In Gesell’s time, stamps were the normal way to levy such a charge. Now, the generalized use of computers in payment and accounting systems, as well as the availability of electronic debit cards, would make this procedure much easier and convenient to implement.

Is such an unconventional concept as “charge money” a theoretically sound one? The answer is a resounding yes, and is supported by economists of no lesser stature than John Maynard Keynes. Chapter 17 of Keynes’ General Theory of Employment, Interest and Money analyzes the implications of such money, and provides a solid theoretical backing to the claims made by Gesell. Keynes specifically states: “Those reformers, who look for a remedy by creating an artificial carrying cost for money through the device of requiring legal-tender currency to be periodically stamped at a prescribed cost in order to retain its quality as money, have been on the right track, and the practical value of their proposal deserves consideration.(note 5) He concludes with the prescient statement that “the future would learn more from Gesell than from Marx.” (note 6) The second part of his statement is now accepted fact. Might he also be correct on the first part?

7. Historical Precedents
The vast majority of the books on economic and monetary theory or history never mention the possibility of such “negative interest” or “demurrage money.” Even the monumental History of Interest Rates, which covers interest from Sumer to today, does not mention it once.(note 7) Is this concept then just a theoretical idea, or is it a practical possibility? In fact, history records the remarkable ability of this concept to adapt to different cultures and circumstances–and to generate spontaneously the behaviors we are trying to promote.

Recall the biblical Joseph, who interpreted the Pharaoh’s dream and saved Egypt from “seven lean years” by stockpiling food. Why would the Egyptians have kept Joseph in such high regard for inventing stockpiling? Its use had been widespread since the beginning of the agrarian revolution several thousands of years earlier. Might there have been more to it than the Bible mentions? These stockpiles were also the basis of the Egyptian monetary system. Each farmer who contributed to the stockpile would receive a piece of pottery having an inscription of the quantity and date of delivery of his contribution, which he could then use to purchase something else. These receipts, or ostraca, have been found by the thousands and were in fact used as currency. However, what the Bible missed is the key to the system: there was a time charge on these receipts. For instance, if someone wanted to redeem an ostraca of ten bags of wheat after six months, he would only receive nine bags. This demurrage charge reflected the costs of guarding the depot and quantities lost to rodents. So we can understand that Egyptian farmers would never hoard this currency but invest in what was most handily available to them: improvements on their land and irrigation systems. This currency was used in Egypt for more than a thousand years, until the Romans forcibly replaced it with their own banking and currency system, more “modern” and having positive interest rates. Note the apparent consequences of this change: As long as negative interest currency was used, the Egyptians built monuments that would last forever and maintained their agricultural system in remarkable condition, making it the breadbasket of the Ancient World. All this quickly disappeared when the Roman currency was generalized. Since then, Egypt has remained for two thousand years a “developing” country.

The Middle Ages
What triggered the exceptional economic and spiritual prosperity in Europe, particularly from 1150 to about 1300, when the extraordinary blossoming of all the cathedrals took place? Few people are aware that this period coincides with the existence of the brakteaten monetary system, under which local lords issued silver plaques that were called back on the average every six to eight months and reissued a bit thinner, amounting to a demurrage rate of about 2-3 percent per month over this entire period. People would therefore automatically invest in anything that would last almost forever: improved land, tapestries, paintings, or cathedrals. From an economic perspective, cathedrals made sense as an investment in the future. There was fierce competition among cities to attract pilgrims from all over the Christian world, and cities competed for cathedrals, just as today they compete for Walt Disney Co. investments. The main difference, of course, is that cathedrals were also symbols of faith, masterpieces for thousands of craftsmen who chose to remain anonymous, and designed as lasting beauty. Is it a coincidence that cathedrals flourished as the most grandiose symbols of community solidarity in Western history, yet declined as soon as the brakteaten system was replaced with the king’s monopoly on the creation of currency? While the previous examples might be discounted because they seem to apply only to pre-capitalistic economies, the following examples bring us to modern times.

The 1930s in Germany
In 1930, Herr Hebecker, owner of a small bankrupt coal mine in Schwanenkirchen, Bavaria, decided in a desperate effort to pay his workers in coal instead of Reichsmark. He issued a local scrip– which he called “Wara”–redeemable in coal. On the back were small squares where stamps could be applied. A bill would remain valid only if the stamp for the current month had been applied. This negative interest charge was justified as a “storage cost.” The workers paid for their food and local services with these Wara. For example, the baker had no real choice but to accept them, and convinced his wheat suppliers to accept them in turn. The process was so successful that by 1931 this Freiwirtschaff (free economy) movement had spread through all of Germany, involving more than 2,000 corporations and a variety of commodities as backing for the Wara. But in November 1931, the German Central Bank, on the basis of its monopoly on currency creation, prohibited the entire experiment.

The 1930s in Austria
In 1932, Herr Unterguggenberger, mayor of the Austrian town of Worgl, decided to do something about the 35 percent unemployment of his constituency (typical for most of Europe at the time). He convinced the town hall to issue 14,000 Austrian shillings’ worth of “stamp scrip,” which were covered by exactly the same amount of ordinary shillings deposited in a local bank. After two years, Worgl became the first Austrian city to achieve full employment Water distribution was generalized throughout, all of the town was repaved, most houses were repaired and repainted, taxes were being paid early, and forests around the city were replanted. It is important to recognize that the major impact of this approach did not derive from the initial project launched by the city, but instead had its origin in the numerous individual initiatives taken in the process of recirculating the local currency instead of hoarding it. On the average, the velocity of circulation of the Worgl money was about fourteen times higher than the normal Austrian shillings. In other words, on the average, the same amount of money created fourteen times more jobs. More than 200 other Austrian communities decided to copy this example, but here again the Central Bank blocked the process. A legal appeal was made all the way to the Supreme Court, where it was lost.

Stamp Scrip in North America
Emergency currencies have a longer history in America than most people realize. They seem to appear with a curious regularity– the 1830s, 1890s, and 1930s–coinciding roughly with the bottom of the long-term economic cycle called the Kondratieff wave. I will concentrate on the last period because it is the best-documented example. The theoretician behind the movement in the United States in the 1930s was Irving Fisher of Yale University. He had analyzed the Worgl case in Austria and published various articles about its success. Subsequently, more than 400 cities, and thousands of communities or organizations all over the country, issued one form or other of emergency currency. Many were stamp scrip, involving the application of a stamp at prescribed intervals (monthly, for example). There was also a movement to issue this stamp script officially nationwide: Senator Bankhead of Alabama presented a bill to the Senate on February 18, 1933, and Representative Petenhill of Indiana presented a bill to the House of Representatives on February 22, 1933.

During this time Irving Fisher approached Dean Acheson, then Undersecretary of the Treasury, to obtain support from the Executive branch for the same idea. Acheson asked the opinion of one of his Harvard professors, who advised him that the system would work but that it would imply strongly decentralized decision making, which he should check out with the President. Soon thereafter, President Roosevelt prohibited any use of “emergency currency” and announced the New Deal centered around a grandiose centralized plan of large construction projects. These examples all show that the concept worked in the modern world whenever it was allowed and correctly implemented.

8. Community Currency
“If you want people to fight, throw them a bone; If you want them to cooperate, have them build a tower.”
–Saint-Exupery, Citadel

Today, local currencies are again mushrooming all over the world in an impressive diversity and increasing sophistication. As Hazel Henderson has pointed out, the key to the success of a community currency, just as for any currency, is trust. In this case it is trust in your neighbors, in the community as a whole, and in the community’s leaders. My focus here is limited to emphasizing that once you have decided to have a community currency, why not use the best design available? It is important that community currencies concentrate exclusively on the two key functions of money–standard of value and means of exchange–and therefore discourage the use of this money as a store of value or a means of speculation. The best way to ensure this, in particular for the more sophisticated electronic forms of local currency now coming online (for example, the Minneapolis Commonweal experiment), is to build in a booster or another form of the demurrage concept.

The majority of the present systems simply use a “zero interest” concept. In contrast, the majority of local currencies implemented in the 1930s explicitly built in the demurrage idea, typically through the process of requiring periodic application of stamps. Stamps are a primitive way of achieving the desired objective; today, with smart cards or electronic accounting for local exchange (LETS) systems, demurrage could be achieved much more effectively and conveniently by simply programming a small charge on outstanding balances.

This small step would have several substantial benefits:
Every participant in the local currency system will become a motivated promoter. One of the features that many organizers of LETS systems have noticed is that over time the originators tend to remain the dominant force promoting the system to new users. Some systems simply die when their original promoter is no longer available for this. Paul Glover, the founder of the Ithaca HOUR money system, mentioned that he spends a good deal of his time convincing new participants to accept the money.(note 10) This is typical, because the other members have no major incentive to actively promote new participants: they can just keep the currency until they have some use for it.

In contrast, in Worgl or in Swanenkirchen in 1930, each participant was personally motivated to convince his butcher, baker, or cousin to accept the money. One of the reasons that local currencies have multiplied in number today but have not spread as widely as in the 1930s is this structural difference in motivation for member participants. More jobs will be created. Community currencies now tend to create no more jobs in the community than normal currencies. This was not the case in Worgl, for instance, where we noticed that every shilling of Worgl money created fourteen times more jobs than a normal national Shilling.

Community spirit will be fostered. In many cases, the motivation for introducing community currencies today is often less to create jobs than to foster community spirit. Community currencies are indeed one of the most effective tools to achieve this. The word community appeared first in written English in 1283. It is etymologically derived from the Old French and Late Latin, where it referred to a group of monks who owned, operated, and lived from the fruits of their monastery. In other words, it referred to the material organization of a self-contained economic entity. Benedictus of Aniane (5th Century) felt that such a process would automatically support the sharing of the spiritual objectives of their members. Consciously promoting more frequent interactions and interdependencies with your neighbors has therefore long been successful in generating this elusive quality of community spirit. Building in the booster concept or another form of demurrage would increase the density of these interactions and therefore also spread its benefits.

Hoarding will become ill advised. Some community currencies have experienced the hoarding phenomenon. Sometimes this is even interpreted as a sign of success, because such behavior reproduces more closely the use of “normal” currency. But every time someone hoards the community currency, he or she is depriving others of its benefits. In addition, as was shown earlier in the discussion of conflict between the store-of-value and medium- of-exchange functions, there are even structural reasons why hoarding should be avoided.

Ecologically sustainable practices will occur spontaneously on a collective level. While other avenues can be used to promote sustainable behaviors, including regulations and education, why should we not use all the available tools? Reprogramming the “invisible hand” to push for ecologically sustainable behavior would be extremely helpful. These benefits will become generalized only if and when demurrage currency becomes the dominant currency. This circumstance is less farfetched than it appears, for some community currencies could play the role of prototype experiments in preparation for a new Bretton Woods agreement.

{Bernard Lietaer is currently a Research Fellow at the Center for Sustainable Resources of the University of California at Berkeley. He is working on a book about the Future of Money, about which a free online conference has coalesced at}

Apps for Democracy: 2 Days Left to Compete
BY Ellen Miller

“The District has been getting major kudos for its IT projects and
which are well-deserved. DC’s data catalog, for instance, has tons of
open data feeds (more than its share about crime, alas), and provides
real-time data from multiple agencies. The District puts it online to
act as a catalyst to encourage agencies to operate more responsively
and timely.

Vivek Kundra, Washington, D.C.’s chief technology officer, launched a
contest (with substantial financial prizes!) titled Apps for
Democracy. DC is looking for useful Web applications using the
District government’s data catalog. The winning designers who create
the best widgets, Google Maps mash-ups, iPhone apps, Facebook apps,
and other digital utilities will split $20,000 in $2,000 to $100
allotments. If interested, you’ll have to work fast. The deadline for
submissions is tomorrow (Wednesday November 12th).”

Vivek Kundra
email :

District of Columbia Launches Open Innovation Challenge
October 15, 2008

Today the District of Columbia Chief Technology Office of the Officer
(OCTO) announced “Apps for Democracy,” an initiative to develop new
software applications to make the DC government’s data more accessible
and useful for the general public and the government. Register for the
contest at

The District collects and maintains vast stores of data on every
aspect of government operations, from government contracts to crime
statistics to economic development and much more. The District has
already organized and published this data in a real-time data catalog
at The new initiative will solicit the best
and most cost-effective ways to package and present this data for easy
viewing, analysis, and repurposing by the public.

Technology developers are invited to compete in creating applications
for popular consumer technologies like iPhones, Facebook, Map Mashups
and others. Developers must use open source programming. The contest
is open to the general public and will run for a month from October 14
through November 14, 2008. The District will host a kick-off on
October 16 and will conduct five open “Innovation Labs” each weekend
to help contestants find collaborators. The contest will conclude on
November 13 with an awards ceremony to unveil the winning
applications. Additional contest details and guidelines for entries
can be found at

The contest will serve as a catalyst to visualize the District’s data
so it will be useful to the citizens of DC, improving their quality of
life; foster innovation in the DC technology community resulting in
startup formation and growth; solve the technology challenges of OCTO
through more cost effective open collaboration; and work towards a new
model for government/private sector cross collaboration that can be
utilized repeatedly to solve our challenges and serve as an example
for other governments.

“The Apps for Democracy contest is part of our drive toward digital
democracy in the nation’s capital,” said District CTO Vivek Kundra.
“Especially in these difficult economic times, it’s crucial to the
government’s mission to find more efficient and impactful methods for
delivering an even higher level of service for a fraction of the cost.
We are ushering in a new age of participatory democracy, one in which
technology is developed by the people for the people.”

DC’s Apps for Democracy: Helping Coders Help the Man (with one small complaint)
BY Matthew Burton / October 24, 2008

“Because this is timely, I reserve the right to say some presumptuous/
incorrect things that I never would have said had I had time to think
it over, as I usually do when I post things here. The Washington, DC
Chief Technology Officer just launched a project called Apps for
Democracy, a contest to create apps with DC’s data catalog.

I love this project. DC doesn’t get much revenue to work with, so this
project makes a lot of economic sense–the tools they will get out of
this contest would, through the standard contracting route, cost about
40 times the $20,000 in prize money they’re giving away. But the
economics, I’m guessing, is what sold the mayor on the project. I bet
the initial motivation was much different: the CTO’s office
understands that the public will create better tools, and more
quickly, than government contractors can. They know that the benefits
of opening their data far outweigh the speculated, yet unproven,

Also, I can tell the CTO likes to experiment. That’s really gutsy,
because an inevitable byproduct of experimentation is failure. This is
why most bureaucrats hate experimentation and would prefer to coast:
sure, you won’t make progress by doing things the same way, but at
least you can’t screw up!

This CTO (Vivek Kundra is his name) gets it. This is exactly the kind
of stuff a CTO should be doing. There are rumblings of such a position
being created under a presumptive President Obama. If it happens, I
hope they use Apps for Democracy as a model for this title: more
technology, less chief officer. Technology is about experimentation,
not red tape. A new bureaucratic position should have an eye for
counteracting the increased bureaucracy it will inevitably engender.
Projects that delegate power to the public are a great way to do that.

I’m excited about Apps for Democracy, but I have some reservations,
which I voice below. As a segue, here are a few possibilities for app
* Use the Speed Detector GIS data to build an iPhone app that
alerts drivers to their presence (though that won’t go over well with
the mayor’s budget office)
* Use the Bicycle Lane and Bike Routes GIS data to build a Google
or Yahoo! Maps mashup that creates cycling-friendly directions
* Use the Trails, Trails NPS, and Crime Incidents data to create
safe jogging routes
* Mash any public safety data–Crime Incidents, Juvenile Arrests,
etc–with a SIMILE timeline to spot trends
* Use that same public safety data to spot correlations between
incidents and the proximity of other facilities; for example, maybe
juvenile arrests near banks spike in June, while arrests near current
construction projects spike in December. (Whether the revelations
would be valuable, we cannot say. But I’m sure sociologists and
criminologists would find it interesting.)
* Use any number of the tourism- and transportation-oriented data
files to make the ultimate online day planner for

I guess some of those ideas are decent. The problem is, I’m just a
citizen. So most of my ideas are for public-facing tools. Only one or
two would improve District operations. Public-facing tools are great,
and the project is accepting them, but is that really the spirit of
this project? I see it differently. The goal here is to help
government, and I imagine Kundra is hoping people will create tools
that do that. As the CTO, his job is to “develop and implement the
District’s IT infrastructure” and provide “technology solutions to
improve services.” What he really wants are tools that help the DC
Government do its job better. This project can yield a slew of neat-o
iPhone apps, but remember: projects like Apps for Democracy ultimately
happen because of the possible budget savings, and if the project
doesn’t deliver on that front by cutting internal IT costs, there may
not be an Apps for Democracy ‘09. So he has to deliver at least one
great new tool for the inside.

What to build, what to build…there are surely countless opportunities
for improving DC’s systems and data management. The problem is,
people like me don’t have the good ideas, because we don’t experience
the day-to-day frustrations of the problems we’d be fixing. We don’t
understand the environment. We don’t know what’s lacking.

The most beneficial tools will probably never be thought of by the
general public. People with no understanding of municipal water
systems can’t (or don’t) ponder ways to revolutionize the DC Water
Authority. Even more important, even if I did have the idea, I would
have little incentive to build it on my own. Unless I understand the
good that will come from creating that tool, I’m not going to spend
time on it. Someone at the Water Authority needs to say, “We need a
tool that will do X, Y, and Z, and it would help us because _____.”
The _____ is the most important part. I’d love to help DC, but only if
I know I’m helping. That’s why there needs to be a way for DC
employees to share ideas with developers. Has this project been
promoted to District employees? The project site is not targeted at
them: it grabs the attention of tech firms and indy developers, but
there’s no mention of the end user. Do they have a forum for voicing
ideas? Whip up a way for those developers to team with District
employees so we can put together something that really changes your
business. What do you say, Mr. Kundra?

UPDATE 10/25 : After posting this, I sent an email to Apps for
Democracy project manager Peter Corbett to tell him about it. He wrote
back in less than an hour saying he’d already read it:

I just read that, Matt and it’s a really good post. I just sent it
to Vivek. We have up for collaboration purposes
and I suggested to Vivek that he broadcast to that we need
ideas from them about what they need built!

I often complain that although the federal government is finally
abandoning clunky enterprise software for more modern Web tools, their
procurement model has not changed: they still rely on the slow,
expensive, clunky contracting route instead of trying the more agile,
release early-release often approach that makes Web tools great in the
first place. But the speed and content of Peter’s response, and his
allowing me to post it here, are all signs that this is a much
different DC software project. I like it.”

Related: Why I Help “The Man,” and Why You Should Too

Mayor Fenty Announces Three National Awards for the Office of the
Chief Technology Officer
NASCIO honors bring OCTO award count to 10 in 2008
September 29, 2008

Mayor Adrian M. Fenty announced today the National Association of
State Chief Information Officers (NASCIO) has honored the Office of
the Chief Technology Officer (OCTO) with three national information
technology (IT) awards. The new honors bring the District’s total IT
awards to 10 in 2008.

NASCIO named OCTO the winner of its Recognition Award in the IT
Project and Portfolio Management Category, an award for state
initiatives that develop governance processes, policies and systems
for the efficient management of IT investments from concept, funding,
implementation and operation to retirement.

The award-winning project was the “stock market model” developed by
Chief Technology Officer (CTO) Vivek Kundra for managing the
District’s IT investments. Kundra’s innovative idea was to manage IT
projects as a portfolio of stocks, with each project as a company, its
team as the management, its schedule and financial status captured in
market reports and customer satisfaction as the market reaction. By
applying these stock-market practices to government technology, Kundra
was able to identify problem projects early and either switch managers
or kill the projects, freeing resources for more promising
initiatives. Earlier this year Kundra was honored for his ground-
breaking stock market model by both the MIT Sloan CIO Symposium,
which recognized Kundra among outstanding IT innovators, and by
InfoWorld Magazine, which named Kundra among the nation’s top
25 CTOs.

NASCIO also awarded OCTO its Recognition Award in the Government to
Business Category. This award recognizes innovative applications that
reduce business costs for regulatory compliance, help companies
establish and grow a business, or improve day-to-day government-to-
business interactions.

OCTO’s winning project was its Certified Business Enterprise (CBE)
online Resource Center. District CBEs are businesses certified by the
District’s Department of Small and Local Business Development (DSLBD)
to participate in the District’s contracting program. The program
directs spending to District-based businesses to create local jobs,
strengthen the local economy, and increase the District’s tax base. To
maximize participation and benefits from the program, DSLBD needed a
user-friendly, comprehensive online certification and contract
compliance application. OCTO developed the application in consultation
with DSLBD, the District’s Office of Contracts and Procurement (OCP)
and the Office of the City Administrator (OCA). The result was a
application that:
* Allows qualified business owners to submit online applications
for CBE certification;
* Enables DSLBD to process the applications via the District’s
* Provides a transparent and efficient process to verify agency
compliance with CBE participation requirements;
* Tracks prime contractor payments to subcontractors to verify
compliance with CBE participation plans; and
* Provides outreach tools to inform the CBE community about
upcoming business opportunities, training classes and DSLBD/District
business events.

The site has enhanced agency and prime contractor compliance with
District CBE requirements, it has dramatically increased the accuracy
of DSLBD data and it has improved the efficiency of certification
processing and compliance tracking.

The third NASCIO award OCTO won was the Recognition Award in the
Government to Citizens category for governmental applications that
provide innovative and/or more efficient services to citizens. OCTO
won the award with its CapStat “Building A City That Works” website.
The site supports CapStat, a cross-agency accountability program
launched by District Mayor Fenty. The Mayor and City Administrator
hold regular meetings with agency directors to review agency
performance data, assign action items, and hold the managers

The CapStat website is central to the program. CapStat meetings are
recorded by video and broadcast on the site. The site offers
performance data from CapStat sessions as well as agency performance
reports. It is updated after each session to provide links to full-
length session videos, resulting action items, and a revised schedule
of upcoming topics. The site offers data catalogs and live feeds on a
wide variety of District performance measures, such as violent crimes,
service requests, permits, and many more. An interactive map
illustrates the reports and shows, for example, where each crime
occurred or which buildings received permits. By providing the
detailed data District leaders need to assess agency performance and
hold managers accountable, and by creating a vehicle for the District
to share all of this data with the public, the CapStat website has
played a vital role in delivering on Mayor Fenty’s commitment to
transparency and accountability in District government.

“For my administration, improving services for citizens and ensuring
accountability and transparency in government are paramount goals,”
said Mayor Fenty. “These important awards from NASCIO, along with
many other recognitions OCTO has received in the past two years,
testify to the key role technology plays in meeting our objectives for
the District.”

“I’m honored by these awards that reflect the evaluation of our peers
around the country,” said District CTO Kundra. “We have assembled some
of the smartest and hardest working people at OCTO so the District can
lead the nation in innovation and service delivery.”

From the archive, originally posted by: [ spectre ]


“to start sorry spelling sorry gramma.
ok its like this i recon… cut cable leading to information u want…
move away from severed point to another point on same cabel… sever
same cable again buy splice in your own info stealing apparatus…
wait for rich fat corps to fix there own cable again… nobody knows
your info is being intercepted and stolen… vwalla. thanks for
comming have a nice day.”
Posted by: annon | Feb 6, 2008 5:12:56 PM

“I got an anonymous IM from someone who works for Haliburton in the
mideast. He says there is 3 teams of techs that are installing taps on
the mideast internet backbones. They have to break the wire to install
the tap. Normally they synchronize their work so there’s no more than
one break every couple of days. What happened was they messed up the
dates. Someone wrote down the wrong dates, and they all broke cables
for taps right around the same time because they were rushing to get a
day off to watch the superbowl.”
Posted by: Johnny | Feb 6, 2008 6:10:52 PM

it’s been done before.
Look up “Operation Ivy Bells”.
Posted by: knowledgeable | Feb 7, 2008 2:25:02 PM

From Wired How-To Wiki

After two underwater cable cuts in the Middle East in early February
severely impacted countries from Dubai to India, alert netizens voiced
suspicions that someone — most likely Al Qaeda — intentionally
severed the cables for their own nefarious purposes, or that the U.S.
cut them as a lead-in to an attack on Iran.

Then two more cables failed in the same area, one in a segment
connecting Qatar to an island in the United Arab Emirates, and another
in a link between Oman and the UAE. The former wasn’t even a cut — it
was a power failure, but you can’t keep a good conspiracy theory down;
some news sites even began reporting incorrectly that Iran was cut off
from the internet.

So how to tell if your favorite Middle East country is still online?
Don’t believe the press — run a traceroute. This simple network
utility traces the hops internet packets take as they work their way
across the internet towards your destination. It also measures how
much time the journey from point A to point B takes, both in total and
for each hop between nodes. If your packets reach their intended
destination (which traceroute will tell you) then you’ll know if those
outage reports on Slashdot are legit or not.

What You’ll Need

* A live, unsevered internet connection
* Access to a command line tool on your computer (optional)
* A browser
* The address of a server somewhere in the destination country

Step 1: Find a Test Server

To do a proper traceroute, you’ll want to pick a server that’s
actually in the destination country. To check Iran, you could just use
a website with a .ir top level domain. Mahmoud Ahmadinejad’s blog, for
example. However, there’s no guarantee that any particular site is
hosted by a server in the country its domain name indicates.
Corporations especially tend to have servers spread out over several
countries. Official government sites are almost always a sure thing.

Step 2: Trace It!

On a Windows PC

1. Click on the Start button and choose Run.
2. In the text box, type cmd. This will bring up a command line
3. Type tracert hostname, where “hostname” is the web address of the
server you want to test.
You can also use an IP address by typing tracert x.x.x.x, where the
“x.x.x.x” is replaced by the IP address of the server.
4. Watch the packets fly across the tubes.

On Mac OS X

You can use the same steps listed in the Windows section by typing the
commands into Mac OS X’s Terminal application. Alternatively, you can
use the Network Utility that’s installed on every Mac.

1. Go to Applications > Utilities > Network Utility.
2. Click on the Traceroute tab.
3. Enter the domain name or IP address of the destination server and
click Trace.
4. Watch the packets fly across the tubes.

Step 3: Analyze the Result

As your packets travel from point A to point B, you’ll see each hop
appear on its own line. Traceroute should display the address and name
of each server or router along the way and the amount of time
(measured in milliseconds) the packets take to travel between your
desktop and that particular node. Eventually, you’ll see your packets
reach their destination. Here’s an example of some raw traceroute

5 (  9.153 ms
8.324 ms  9.992 ms
6 (  8.640 ms (  15.416 ms (  19.954 ms
7 (  207.604 ms (  17.331 ms (  9.409 ms
8 (
185.547 ms  196.288 ms
(  214.908 ms
9 (  300.511 ms  295.637 ms  310.359
ms 10 (  299.642 ms  289.998 ms
289.825 ms
11 (  297.686 ms
302.144 ms  290.565 ms
12 (  308.476 ms  298.427 ms  299.402
13 (  292.028 ms  292.011 ms  292.007 ms
14  * * *
15 (  307.571 ms  328.233 ms  327.580 ms

The times displayed are 3 pings from your desktop directly to that
node, not the time its taking between the previous node and the
current one.

Asterisks (* * *) indicate a timeout. If you see a line with just
asterisks on it, that means that the hop between nodes took longer
than 200ms. Several lines of timeouts mean the packets are being held
up, clogged or lost somewhere along the way. Blame the terrorist group
or national intelligence organization of your choice.

* Note some points on the traceroute will show a timeout because
administrators have restricted pings, and this may not necessarily
indicate a fail point. If the destination host is reachable at all,
then failures will typically be sporadic as in: * 200ms * (2 timeouts
and 1 successful). #14 above would indicate that the node is just
blocked for pings.


* To make sure your packets actually reached a server in the
intended country, you can look up the destination IP address to
determine its location. Consult the ARIN WHOIS database to dig up a
server’s location info.

* Uri Raz’s webpage has several useful tips for determining the
geographic location of servers on the internet.

* You can also use tools like IP2Location or GeoBytes’ IP Locator
to find out where a server is physically located.

* Instead of verifying the location server after the fact, you can
start out by using one of the destination country’s domain servers. To
find one, visit the listing of Root-Zone Whois information maintained
by the Internet Assigned Numbers Authority and click on the country
you want to reach. Under the list of Domain Servers, look for the
server with the same top-level domain as the destination country.

Portions of this how-to guide originally appeared in a post by Ryan
Singel on Wired’s Threat Level blog. Also, thanks to Kevin Poulsen for
the traceroute data and the inspiration.


Submarine Cables, Subsidiares and Subversion

[UPDATE – 02/12/08 – The Complete Guide to the 2008 Internet Outage
has been finished. It contains the most up to date information
including detailed images and explanations to help unravel this cable
mess. Please check it out here]

First off, I want to thank everyone for the positive feedback that I
have received for my last post, which illustrated the locations of the
5 submarine cables that have been damaged over the past couple of
weeks. I’m glad to see that some news sites such as Slashdot featured
my post and that people are starting to take a critical look at what
is happening.

[UPDATE: this post was recently featured in the most recent Epic-Fu
video episode. Check out the video here, and join the discussion

That being said, I’m sure that everyone is eager to read the results
of my findings on why these cables may have been damaged, who has to
gain from the damages, and where we, as concerned citizens, should
start to look for answers.

Before I begin, I would like to point out that these findings are from
my own research. I am not accusing anyone of anything here. I am
simply providing a resource for the rest of the internet so that
people can start to investigate what may really be happening over
there. There are some facts out there that are just too big to ignore.
While I may not be the person capable of asking the big questions to
the right people, I can still provide information for the people who

First of all, I want to revisit the map of the cable damages that have
occurred over the past few weeks:,52.734375&spn=99.660056,166.992188&z=2&source=embed

We have been told by various organizations that these damages are
attributed to power failures or by an anchor being accidentally
dragged along the ocean floor during a storm. However, it doesn’t take
more than a 5th grade education to start to recognize that there may,
in fact, be a pattern to what we are seeing here. When something like
this occurs, it starts the mind roaming around the possibilities as to
why this may have occurred.

Well, there are a few possibilities. Here are the top 4 possibilities/
connections that this author was able to find in his research:

#4 – Big Telecom Companies

In talking to a network operations manager about the damages that have
been done to the cables, the first companies that he suggested, which
stand to gain from this type of damage, are the larger
telecommunications companies. Especially the land-based ones. Here’s
why: when a huge pipeline providing tons of information to a
particular area is damaged, re-routing almost always occurs before
repair. This means, that the companies which surround the outage or
are within the outage area stand to benefit from the sudden jump in
needed bandwidth.,142068-page,1/article.html

So, which companies have some ties into this mess? Well, there are a
few companies that popped up while doing my research. However, for the
scope of this article, let’s look at Verizon Business. To start things
off, Verizon partially owns the SeaMeWe-4 (along with AT&T) cable that
was severed. According to them the repairs could take days but they
were going to offer an alternative network as quickly as possible.
Alternative meaning, routing through somewhere else. How else might
Verizon be involved with this deal? Verizon Business has ownership in
many of the submarine cables that have been in recent news. In
addition, they began work in 2007 on a new cable that will render
others obsolete. The construction for this is supposed to complete
this year. (source) By Verizon Business’ own admission, they’re all
about getting global:

“Global Strategic Services Still Driving Solid Verizon Business
Growth…Global sales of strategic services such as IP, Ethernet and
managed services continued to accelerate dramatically during the past
quarter, exceeding declines in revenue on a year-to-date basis from
traditional core voice and data services. In the fourth quarter 2007,
strategic services generated $1.4 billion in revenue, up 25.1 percent
from the fourth quarter 2006.”

With all that said, it seems very likely that Verizon would very much
want these cables to be damaged. Whether it be to leverage their land-
based networks or to further increase the popularity of their new
cable, it’s hard to ignore the connections.
#3 – December 2007

In December of 2007, there were a few events that occurred related
directly to the damages that we have recently seen. While these events
may be unrelated and/or random, the correlation is hard to ignore.

December 1, 2007: Alcatel finished its merger with large U.S. telecom
company Lucent. Why does this matter? Alcatel provides hardware and
service to large telecommunications companies. In fact, according to
their Wikipedia entry they are a “leading provider of optical
transmission equipment, especially for submarine communications

December 20, 2007: Reliance Communications (FLAG) finishes the multi-
million dollar acquisition of U.S. based company Yipes. (source) Why
is this weird? Well, Yipes provides solutions for data warehousing and
multimedia communications transfer. This acquisition would bring, yet
another U.S. based company, tons of pull in the global
telecommunications environment:

“The combination of Yipes’ enterprise Ethernet services; the
private undersea cable system of FLAG Telecom, a subsidiary of
Reliance Communications; and Reliance’s commitment to expansion and
growth will enable the creation of a global service-delivery platform
with unmatched coverage and capability.”

December, 2007: Iran announced that they were freely trading oil
without the use of the U.S. dollar. More details about this a bit
later in the post.

While there were other notable events in the global telecommunications
field in 2007, December seemed to be particularly full of events that
could possibly be related to the recent submarine cable damages.

#2 – Reliance Communications and FLAG

First of all, you need to understand that Reliance Communications is
part of a large huge massive company that, grouped with Reliance
Telecom and Flag Telecom, makes up Reliance Communications Ventures.
They provide solutions for all kinds of telecommunication services for
India as well as other countries. As an example (and to tie them even
closer to the Middle East), in June of 2006, Reliance Communications
along with Orbit Communications Company launched RiTV in the Middle
East. This is an interactive multimedia solution including on-demand
entertainment and internet access.

Reliance Communications is the leading broadband service provider in
India and part of another massive group of companies known as the Anil
Dhirubhai Ambani Group. Together, they are delivering service to over
19 million subscribers. One of the companies belonging to this group
is called Reliance Power Limited (RPL). Here again, we see a direct
tie into a large mostly-considered U.S. company. It’s a little company
called Chevron.

How big of a stake does Chevron have here? How about a 5% (that can
increase to 29%) stake in RPL? (source) Why would Chevron be
interested in an Indian energy company? Jamnagar. That link leads to
the Wikipedia entry for the Indian state. That link, however, does not
talk about how important a role RPL plays in that state — important
read as: 650,000 barrels per day. But that’s just the refinery that is
currently there. RPL is working on a new refinery that will have a
capacity of 580,000 barrels a day. That’s 1,230,000 barrels of oil
money that will be coming out of Jamnagar every day. It is expected
that this refinery will be completed this year.

The Anil Dhirubhai Ambani Group is far too large to try and track down
the various connections that they may have to the Middle East, but,
being that it is one of the companies most tightly knitted into this
knot of submarine cable woes, they deserve a mention.

This brings us to the number 1 reason that this author has found which
could explain the recent submarine cable damages.

#1 – The Iranian Oil Bourse

Through the research that I have exhaustingly done over the past few
days, this is the one that has struck me as the most likely reason for
the damages that have occurred to submarine internet cables.

First, a bit of background. A bourse is a, typically European, word
which refers to a stock exchange. Great, so Iran is going to have
their own “oil stock exchange,” but why does this matter? The Iranian
oil bourse was going to be a stock market for petroluem,
petrochemicals and gas. What’s the big catch here? The exchange
planned on being ran with currencies excluding the U.S. dollar. If you
remember from earlier in the post, Iran stopped allowing purchases of
their oil with the U.S. dollar in December of 2007. So, obviously, the
U.S. is not going to be happy about this. The biggest piece of
information linking this to the recent damages is the proposed
location of the bourse: the island of Kish. This is the island that is
RIGHT NEXT TO at least two of the cuts that have recently occurred:

And the locations of the cable damages once more:

To make matters even more interesting, the bourse was scheduled to
open this month.

Some of you may suddenly be thinking to yourselves that this sounds
familiar. That’s because the last person who decided to stop using the
U.S. dollar for trading oil was a man by the name of Saddam Hussein in
the fall of 2000.

[UPDATE: To further add to this argument, this would not be the first
time the U.S. would have disrupted submarine cables to further
themselves in times of war or conflict.]
(Operation Ivy Bells)
(Previous NSA Submarine Wiretaps)

As I said before, these are bits of information that hopefully others
can use as a resource to determine the true cause of these massive
internet outages that we have seen over the last couple weeks. I am
not blaming one source or the other. I am simply helping to increase
the awareness of what may really be happening right under our noses.

“Whoever undertakes to set himself up as a judge of Truth and
Knowledge is shipwrecked by the laughter of the gods.” – Albert

If you have additional information or updates to this, please drop me
a line. My email address is writer at


Cable Cut Fever Grips the Web
Are underseas telecom cable cuts the new IEDs?
BY Ryan Singel  /  February 06, 2008

Stephan Beckert of TeleGeography Research says it’s all a bit much:

“I’m much more worried about terrorists blowing up people than
cables,” Beckert said. “If you cut a cable, all you are doing is
inconveniencing a lot of people.”

Only the first two cuts had any serious impact on the internet, says
Beckert. Those cables near Alexandria, Egypt account for 76 percent of
the capacity through the Suez canal — connecting Europe with the
Middle East, North Africa and the India sub-continent.

Once those failures sensitized a conspiracy-happy net, it was natural
that other cable failures would be found to feed the frenzy, because
they occur all the time.

“Cable cuts happen on average once every three days,” Beckert said.
There are 25 large ships that do nothing but fix cable cuts and bends,
Beckert adds.

While any severed cable is a “cut” in the parlance of telecom, most
often they’re the result of cables rubbing against sea floor rocks,
eventually cutting through the copper shielding and exposing the thin
fiber optics inside.

Normally, netizens have no idea when there are cable cuts since large
providers instantly re-route communications through other cables.

“These outages don’t usually affect end users,” Beckert said. “For
example, Verizon doesn’t just have one link across the Atlantic, they
have seven, eight or nine they can route capacity on.”

Professional terrorist fear monger Annie Jacobsen says Middle Eastern
governments are lying about the real reason for the cuts. 9/11
truthers suggested the cuts came in preparation for a U.S. government-
faked terrorist attack on the Super Bowl. Bloggers have suggested that
the cuts are cover for the NSA installing taps on the lines using the
U.S.S. Jimmy Carter. The commander, though, seems to have an alibi.

That said, even some security experts who early on dismissed
suggestions of intentional sabotage are starting to get a little

Take Columbia University Professor Steven Bellovin, a computer
security and networking expert, for one:

As a security guy, I’m paranoid, but I don’t understand the threat
model here. On the other hand, four accidental failures in a week is a
bit hard to swallow, too. Let’s hope there will be close, open
examination of the failed parts of the cables.

Last week Todd Underwood, a vice president at internet analysis firm
Renesys, told THREAT LEVEL that outages are to be be expected. But on
Wednesday, he sounded a more cautious note.

“There’s a little cause to be suspicious but there is no smoking gun,”
Underwood said.

If the cuts were deliberate, one has to answer the question of means,
motive and opportunity. Since it’s not that hard to sever an
unprotected cable, the real question is motive, according to

“Its difficult to tell what the motive would be: is it just to annoy
people?” Underwood said. “If it were targeted, the targeting is bad.
The loonies on the American left say this was us targeting Iran. If
this is us targeting Iran, we are much worse than I thought we were.”

“Are we really targeting India or Pakistan?” Underwood asked

The real answer will likely come once the repair ships begin pulling
up the cable from the sea floor to repair it in the coming days and
weeks, according to Underwood.

“Then we will know quite a bit more,” Underwood said. “Does it look
like an anchor hit or did someone take an acetylene torch to it?”




Quoth the late, great Reverend Ivan Stang of the church of the
subgenius; Attributed and expanded…
“Of all conspiracy theories out there, there is one above them all.
All conspirators pay homage to it, be they the Yeti, the Men in Black,
the CIA, NSA, IRS, the Learned Elders of Zion and even the Reptillian
Overlords from Draco. This is known simply as “The Conspiracy”… What
is it? Simply put, the attack on Conspiracy theorists using the most
negative aspects of it. A person who compares the prices of three
‘competing’ phone companies and finds them similar becomes equated
with the person that calls the radio show and says that martians are
sending robots disquised as dogs but when you cut them open you see
blood and guts and stuff because of their ‘raydeo waves’…”
Posted by: Conspiracy! | Feb 6, 2008 2:45:52 PM

You wrote:
“There are not 8 confirmed cuts. Your type of “reporting” is exactly
why I had to write this post.”

There are ***EIGHT*** (or nine if you count the “unreported one from
Jan. 23).
Two off of Alexandria, Egypt
One in the Suez, Egypt
One off of Marseille, France
One off of Dubai, in the Persian Gulf
One off of Bandar Abbas, Iran in the Persian Gulf
One between Qatar and the UAE, in the Persian Gulf
One near Penang, Malaysia

Here they are:
THREE IN EGYPT – one running through the Suez to Sri Lanka; two near
“DUBAI (Zawya Dow Jones)–A third undersea fibre optic cable running
through the Suez to Sri Lanka was cut Friday, said a Flag official.
Two other fiber optic cables owned by Flag Telecom and consortium SEA-
ME-WE 4 located near Alexandria, Egypt, were damaged Wednesday leading
to a slowdown in Internet and telephone services in the Middle East
and South Asia.”
Here’s number FOUR: “the other in the waters off Marseille, France,
telecommunications operators said.”
Here’s FIVE: Between Dubai and Oman
“Internet provider in UAE confirms undersea cable cut between Dubai,
Oman, cause unknown”
Number SIX: near Bandar Abbas, Iran (being avoided by major media as
it’s in IRAN and will really stoke conspiracy “theories”???)
“FALCON near Bandar Abbas in Iran and SeaMeWe-4”
“FALCON Segment 7a – Fault 1st February between BND (Bandar Abbas,
Iran) and KWI (Kuwait), we are waiting for ship to go out and it maybe
fixed before going out the fault on 7b – to be confirmed.”
“FALCON Segment 7b (Bandra Abbas – Al Seeb) – E-Marine continues to
await the permit to enter the Iranian waters and current forecast for
the ship to start a work is around 19th February.”
Number SEVEN: Between Qatar and the UAE:
“An undersea telecom cable linking Qatar to the UAE was reported
damaged on Friday”
“This is the third incident of its kind in the area since January 30
since the cables were first damaged in the Mediterranean and then off
the coast of Dubai, causing widespread disruption to Internet and
international telephone services in Egypt, Gulf Arab states and south
And, number EIGHT: near Penang, Malaysia
“SeaMeWe-4 (South East Asia-Middle East-Western Europe-4) near Penang,
Number NINE: “unreported”
“The first cut in the undersea Internet cable occurred on January 23,
in the Flag Telcoms FALCON submarine cable which was not reported.
This has not been repaired yet and the cause remains unknown,
explained Jaishanker.”
So, there ya have it. At least EIGHT, if not NINE.
Posted by: EIGHT CUTS! – Search them! | Feb 6, 2008 3:23:24 PM

While we’re all throwing out wild causal speculations on events that
are themselves speculative in nature, mind if I put in my two cents?
Responding to Mr. Underwood’s (initial) skepticism, say its not a
prelude to a US attack. And in light of Sen. Rockefeller’s comments
today re: the NSA’s global operations, maybe the aim wasn’t to take
out certain cables. Just make sure that only the right ones are left
for traffic to be re-routed to.
Either that or, if not a Seawolf sub engaged in shenanigans on the
seabed (as laid out in “Blind Mans Bluff”) perhaps a less-capable,
less-skilled regional power might be attempting similar shenanigans
this time around. Its likely only their failed taps would be detected
as cable failure, and the successful taps would likely remain
undiscovered, no?
But it’s probably just a simple fact that the world is become more
wired and more unmanageable with each passing year, and accidents WILL
Posted by: SPD | Feb 6, 2008 3:34:46 PM

Easy to say that Iran has internets, but the facts beg to differ:
Let’s all just hope this is not in preparation for GWB’s last and
worst criminal offense- war with Iran.
Posted by: PluriMediaGroup | Feb 6, 2008 3:36:42 PM

Has anyone considered this as part of an elaborate man in the middle
known text cypher attack aimed at manipulating financial transactions
by altering timecode stamps? Cable splicing often involves the use of
buffers that store data and retransmit it time delayed. A tiny
fractional time variation in a financial transaction can translate
into huge amounts of money if applied many times.
Posted by: Bruce Surly, Counterpain | Feb 6, 2008 3:39:03 PM

This one has Bush bin Laden written all over it, six ways from Sunday.
Lori R. Price
Mgr., Citizens For Legitimate Government
“Hi, mom, this is Mark Bingham… you believe me, don’t you?” Mark
Bingham – Sept. 11, 2001
Posted by: Lori Price | Feb 6, 2008 4:38:26 PM

Telegeography, Inc.? A division of Primetrica? WTF? Go to their
websites: and . Read their literature and tell me
they don’t look exactly like CIA front corporations or some such
Strategic, Analytic, Intelligence (all terms from their website)
Mr. Beckert, I think you are lying.
Posted by: Free | Feb 6, 2008 4:47:10 PM

They [Iran] haven’t had internet according to that webpage for a week.
(I’ve been watching too)
Posted by: Randy | Feb 6, 2008 4:56:25 PM

@ There are 8 –
You are counting the same cuts over and over. The 3 in the market
watch include the two from the Times article. The Times report on the
Marseille cut is very likely inaccurate and was really in Egypt as
every one else reported.
That takes 3 away from your count. No one will know how or why until
the cables get pulled up.
Posted by: Ryan Singel | Feb 6, 2008 5:00:30 PM

An unknown number of cables cut AND the Maharishi died today. What it
means, I don’t know but don’t speak to me of coincidence!
Posted by: Caesar Tjalbo | Feb 6, 2008 5:05:06 PM

to start sorry spelling sorry gramma.
ok its like this i recon… cut cable leading to information u want…
move away from severed point to another point on same cabel… sever
same cable again buy splice in your own info stealing apparatus…
wait for rich fat corps to fix there own cable again… nobody knows
your info is being intercepted and stolen… vwalla. thanks for
comming have a nice day.
Posted by: annon | Feb 6, 2008 5:12:56 PM

Connecting The Many Undersea Cut Cable Dots
1) one off of Marseille, France
2) two off of Alexandria, Egypt
3) one off of Dubai, in the Persian Gulf
4) one off of Bandar Abbas, Iran in the Persian Gulf
5) one between Qatar and the UAE, in the Persian Gulf
6) one in the Suez, Egypt
7) one near Penang, Malaysia
8) initially unreported cable cut on 23 January 2008 ( Persian Gulf? )

Three things stand out about these incidents:
1) all of them, save one, have occurred in waters near predominantly
Muslim nations, causing disruption in those countries;
2) all but two of the cut/damaged cables are in Middle Eastern waters;
3) so many like incidents in such a short period of time suggests that
they are not accidents, but are in fact deliberate acts, i.e.,

The evidence therefore suggests that we are looking at a coordinated
program of undersea cable sabotage by an actor, or actors, on the
international stage with an anti-Muslim bias, as well as a proclivity
for destructive violence in the Middle Eastern region. The question
then becomes: are there any actors on the international stage who
exhibit a strong, anti-Muslim bias in their foreign relations, who
have the technical capability to carry out clandestine sabotage
operations on the sea floor, and who have exhibited a pattern of
violently destructive policies towards Muslim peoples and nations,
especially in the Middle East region? The answer is yes, there are
two: Israel and the United States of America.
Posted by: bernard shakey | Feb 6, 2008 5:17:02 PM

Ryan, I’m so glad to read an article that looks at both sides and
makes sense.
You’re correct; if it’s with motive, then the attackers’ are idiots.
Now, if I hear that an EMP goes off in Iran, then well…..well I’m
sure I’ll never hear the end of it.
Posted by: Flomaster ’95 | Feb 6, 2008 5:22:43 PM

I got an anonymous IM from someone who works for Haliburton in the
mideast. He says there is 3 teams of techs that are installing taps on
the mideast internet backbones. They have to break the wire to install
the tap. Normally they synchronize their work so there’s no more than
one break every couple of days. What happened was they messed up the
dates. Someone wrote down the wrong dates, and they all broke cables
for taps right around the same time because they were rushing to get a
day off to watch the superbowl.
Posted by: Johnny | Feb 6, 2008 6:10:52 PM

The cable cuts are designed to disrupt the Iranian Oil Bourse.
Posted by: Richard | Feb 6, 2008 6:14:23 PM

The tally is in. Johnny is our runner up for second funniest post with
“‘Anonymous Haliburton IM.” The funniest goes to ….
dorkhero for “bite marks”! Congratulations to our winners the rest of
you need to try harder next time.
Posted by: Simon | Feb 6, 2008 6:49:50 PM

The last time a mid-east country threatened to start selling oil in
Euros (Saddam 2002) we got shock and awe. This time (Iran Oil Bourse)
the response is a little more sophisticated and probably as effective.
Thou shalt not attempt to kill the flaky greenback.
Posted by: Pat | Feb 6, 2008 9:25:36 PM

wires work two ways though. maybe nobody wants anyone to see what’s
going on inside somewhere.
Posted by: ian | Feb 7, 2008 12:16:08 AM

before we go to monsters inc. what are the physics of u/w cables?
pretty heavy some whale species might be able to yank away but you’d
have to be pretty mad to be able to cut this seems beyond me – however
there was a programme on uk tv recently where it was found that
dolphins were being murdered by their own kind
Posted by: peter | Feb 7, 2008 1:18:40 AM

it was me. i cut the cable.
Posted by: jorge | Feb 7, 2008 1:48:36 AM

Ok – assuming it was the EVIL US/Israel. Why? To prevent Iran from
communicating with its vast empire? Radio still works, Sat phones/
links still work, intra-country lines still work – communications have
only been impacted and not prevented. Plus it’s a huge signal of
intent if you cut cables, then wait weeks before actually attacking.
Heck, if we’re playing conspiracy theory – I’d bet it was the Mid-East
despots themselves who cut the cables. Why let your citizens view
western values and send pictures of what is actually happening? Better
to control them by limiting their communication with the outside
Posted by: scott | Feb 7, 2008 5:28:57 AM

Here’s a variant on the conspiracy I really like! Assume the cuts were
deliberate and calculated. The effect of the cuts are to re-route
internet traffic between Northern Europe and Pakistan so
that it now traverses the USA. Who might want that?
Posted by: tinhat | Feb 7, 2008 5:34:08 AM

Israel is NOT cut off from the internet. Most people reading this
probably already know this, but I’ll explain it for the rest of you. makes it’s measurment by pinging ONE
specific address. For Iran, they use They haven’t
gotten a response from that ONE address for a few days, so they show
the ENTIRE country as offline, when really it’s just one router which
is offline or maybe just has a different address now. Check out
or, which have the same domain and are working fine.
Not only is Iran online, but the Iranian University with the bad
router address is also online.
Posted by: Stan | Feb 7, 2008 6:00:16 AM

You are all missing it! It is Diebold that is cutting the cables. That
way the Intraweb tubes won’t work and nobody will know about their
dastardly plan to re-elect ChimpyBusHitler by manipulating the votes
in Iran.
Posted by: Connect the dots! | Feb 7, 2008 6:04:23 AM

I like tinhat’s twist… Especially considering the CIA analyst’s
statement last month about cyber-hackers (OOOoooOOOOooohhhh…)
takingdown power grids in other countries.,141564-c,hackers/article.html
Which countries? He won’t say, but the CIA definitely needs to snoop
on all packets that enter and leave the US to protect us from…?
Posted by: manny | Feb 7, 2008 6:05:52 AM

I love how all these people insisting that the internet traffic report
site shows Iran really is completely offline and the people claiming
otherwise are liars have not taken the simple step of CHECKING AN
IRANIAN WEBSITE to see if it is reachable. Go on, give it a try. The
results may surprise you. Here are some links to get you started:
Posted by: Fearmonger | Feb 7, 2008 6:54:36 AM

I heard that they have found stingray barbs and saltwater crocodile
bites in the cables. Experts are theorizing that it could be a group
of rebel fish that have partnered up with a reptile militia.
Apparently, they have not liked the way they have been portrayed in
the world media over the past few years. They would have struck sooner
but travel time was longer than expected.
Posted by: getyourbone | Feb 7, 2008 7:01:02 AM

All the troother stuff aside, the USS Jimmy Carter is not the only
vessel capable of this sort of thing. and this is not the first time
this has been done. During the cold war, the US tapped a subsea cable
in the white sea that was used by the Soviets to communicate with
their missile sub bases. We tapped their communications for years
before they found the tap.
We have a number of Navy “oceanographic vessels” with ROV and
Saturation Diving capability all over the world. Any of them would be
capable of doing this as well.
Posted by: Rorschach | Feb 7, 2008 7:22:12 AM

I used to work at Bellcore (and tellabs and other places) in the field
of Optical Networks and Fiber media and components. I regard the
possibility of 4 fiber cuts (ok, three and one power outage) in such a
small area of the world remote at best.
An undersea cable is designed to withstand enormous pressures and
physical conditions, and that’s why, throughout the world, there are
only 11 cuts over the millions of deployed route-miles.
The idea of isolating Iran through this is not, I think, particularly
credible, particularly seeing that it would do far more damage to
western economies than to Iran.
The four cuts appear to my eyes to be an uninformed attempt to break
the working and protect sides of undersea BLSR (or their SDH
equivalent) fiber rings. Given their proximity to one another in both
time and space I can not ignore the possibility that this is not an
accident, and the author’s assumption that any belief on the contrary
is way below the normal standard for Wired.
Posted by: Em | Feb 7, 2008 8:04:01 AM

Iran’s global oil bourse was due to open this week – trading oil & gas
for euros and yen. Iran has no Internet access atm – witness
and, both down. It’s pretty obvious what is happening. The
oil bourse was due to start in March 2006 originally but had lots and
lots of difficulties. Hrm, I wonder who would shutdown Iran’s oil
bourse… it’s so hard to conceive…
Posted by: GreyGhost | Feb 7, 2008 8:50:27 AM

This is what is actually happening:
A rich communications tycoon was killed, and his daughter inherited
the business. She’s building an overland fibre optic link across the
Middle East, and wants to make sure it will be a success. She got a
guy that once kidnapped her to hijack a Russian submarine, and
secretly they are going around the seas of the Middle East sabotaging
cables. I’m trying to stop it all, but my BMW got cut in half by a
helicopter while I was driving along a pier.
For the daughter of the communications tycoon, The World Is Not
Posted by: JB | Feb 7, 2008 9:14:18 AM

I have never seen so many idiots posting in one spot. Iran has not
lost net connectivity. One router in Iran — the one that happens to
be used by Internet Traffic Report — is unreachable. As are dozens of
single points on the internet in many states in the region. By the
same metric, Columbia, Germany, and Florida are also now offline. A
quick perusal of, e.g., newspaper web sites in Iran finds every one I
have tried working fine, including all state-run media:
As is the web site of the Government of Iran:
…and numerous other government and press web sites physically
located in Iran. See for yourself:
(And yes, I am aware that simply ending in .ir does not mean the site
is necessarily physically in Iran, but you can easily verify via ARIN
that nearly all of them are.) So the premise that Iran is “offline”
and its implication are inaccurate.

Also, to the last poor fool who said “” and “” are
1. and are both up.
2. and are not even in Iran.
And, on the Oil Bourse: Iran can still conduct the bourse WITHOUT
undersea cable connectivity. They have missed their own deadlines
three times for opening the bourse, and just because it opens with all
the rhetoric of not using the dollar doesn’t mean it will be
successful. When all you can come up with is links from Iran’s state
run press and “Dissident Voice”, you’re really reaching. You people
are an embarrassment, literally, to the notion that humans are
intelligent. Get a life, or at least a grip on reality.

Dave Schroeder
das [at] doit [dot] wisc [dot] edu
Posted by: Dave Schroeder | Feb 7, 2008 9:18:09 AM

“If you cut a cable, all you are doing is inconveniencing a lot of
people.'” You need to understand Muslim radicals’ motives. They are
isolationists. Their main motive for blowing up people in Iraq and
Israel (what they call Palestine) is not only hate, they want us to
get out. At the same time, they don’t want Western cultural
influences. When you have iTunes, (and, and a ton
of other stuff that they view as filthy (ie’s upcoming swimsuit
issue) coming over these fiber-optic cables and a sea chart that says
“Don’t Drop Anchor Here! Fiber Optic Cable”, what do you expect?
(They’ll drop their anchor)
Posted by: Ed | Feb 7, 2008 9:20:34 AM

Well, if any ill-intending evil organizations (including, of course,
all of them everywhere) haven’t considered these ideas before, perhaps
they will now. Does speculating on cutting, tapping, fund rerouting,
etc…schemes that eventually leads to someone actually doing said
scheme result in treason or conspiracy? If terrorists read Wired, see
and use your idea, could you be held accountable? If the US is the one
to use it to great terrible deadly ends, do you get a medal?
While were at it, though, we could postulate a few more evil schemes.
Perhaps cutting the wires to convince the affected country that they
need a new infrastructure, resulting in billion dollar loans and
revenue to US/USbacked contracting organizations, who would then
rebuild the infrastructure, but leaving the country with
insurmountable debt. John Perkins type jackal and Economic HitMan
Posted by: iZealot | Feb 7, 2008 9:26:06 AM

I think its part of the marketing campaign for Cloverfield.
Posted by: marcusjones | Feb 7, 2008 10:18:20 AM

The MQ-1B Predator is controlled from Las Vegas via underground and
underwater fiber-optic cables linking the ground-control stations to
Europe, where a satellite dish makes the connection directly to every
Predator in the air.
Posted by: mdubbleyou | Feb 7, 2008 10:20:26 AM

It’s not a conspiracy. It’s Godzilla.
Posted by: Ray Eston Smith Jr | Feb 7, 2008 10:54:13 AM

Ray Eston Smith Jr, it’s not Godzilla. Godzilla would be cutting
cables near Japan, not Egypt. It’s the Goa’uld.
Posted by: Dalkorian | Feb 7, 2008 12:54:22 PM

Because of the internet being cut in half, my face has eaten a yard of
sweetened bread!
Who will this madness pie?? I have links to webpages, so that proves
Posted by: Sirch | Feb 7, 2008 1:22:26 PM

A frantic young female CIA agent is strangled in the style of a
jihaidist who has been dead for many years. An American journalist
unearths a clue to the the crime. She discovers that she herself is
actually responsible for the cut of the cables!
Posted by: The Do-It-Yourself Conspiracy Generator | Feb 7, 2008
1:36:28 PM

An American agent has her throat cut in a mosque. A TSA employee
overhears a conversation about the crime; and he unravels the
complicated plot and leads the FBI to the cable cutter. Unfortunately,
he is mistaken, and soon the real cable cutter is on his internet.
Posted by: he Do-It-Yourself Conspiracy Generator | Feb 7, 2008
1:39:08 PM

There is also a great deal of information available here:
Posted by: Taolf Sujat | Feb 7, 2008 1:56:10 PM












Posted by: Fronz | Feb 7, 2008 1:57:25 PM

I told my professor that I did not do my homework cause the cables had
been sabotaged. Even she didn’t believe me… :(
Posted by: aloowalah | Feb 7, 2008 2:12:52 PM

it’s been done before.
Look up “Operation Ivy Bells”.
Posted by: knowledgeable | Feb 7, 2008 2:25:02 PM

Are we sure its not just cooper thieves?
Posted by: | Feb 7, 2008 2:49:32 PM

They have the internet on computers now?
Posted by: U.Pseudonym | Feb 7, 2008 5:18:03 PM

ok here it is again: ok its like this i recon… cut cable leading to
information u want… move away from severed point to another point on
same cabel… sever same cable again buy splice in your own info
stealing apparatus… wait for rich fat corps to fix there own cable
again… nobody knows your info is being intercepted and stolen…
vwalla. thanks for comming have a nice day.
Posted by: annon | Feb 7, 2008 6:51:15 PM

These events(4 to 8 cables being cut) highlight the fact that their
may, or may not be, a vast or minute conspiracy to effect some thing,
some where in the world for some purpose. I think that solves it. If
not conspiracy, then it must be the same guy who stole the cables from
the train station here in Gloucester Mass. Maybe copper thieves are
forming an international conspiracy!
Posted by: captinseafood | Feb 7, 2008 6:58:30 PM

and again so u can get in ur heads. coz its realy this simple. ok here
it is again. ok its like this i recon… cut cable leading to
information u want… move away from severed point to another point on
same cabel… sever same cable again buy splice in your own info
stealing apparatus… wait for rich fat corps to fix there own cable
again… nobody knows your info is being intercepted and stolen…
vwalla. thanks for comming have a nice day.
Posted by: annon | Feb 7, 2008 6:59:15 PM

so iran has still internet and we all just nuts tinfoil hats? good so
explain this :
Posted by: trustno1 | Feb 8, 2008 5:28:51 AM

Interview with a senior telecommunications analyst with his thoughts
on whether the cuts were intentional and the impact on global
Posted by: | Feb 8, 2008 9:10:02 AM

I don’t know why other Americans are making snarky comments about this
issue, especially on the Wall Street Journal or Wired.
If the Iran oil bourse is successful, others will follow. Americans
will then use $100 dollar bills to heat their homes, because they will
be worthless.
Posted by: wake up Americans | Feb 9, 2008 8:41:40 AM

The Internet Traffic Report page monitors ONE ROUTER at an academic
institution in Iran. That router is currently unreachable. It is ONE
ROUTER. Please go back and read my previous post. Every single
newspaper and other web site in Iran, including state controlled
media, universities, official government web sites, and even
Ahmadenijad’s personal “blog” are all up. Did you read nothing I said?
Iran has NOT lost connectivity, and never did. Therefore, your
ridiculous assertions based on this provably false claim are all

Again, please read my Feb 7 post above, and see for yourself. Sorry to
burst your little conspiracy theory bubble. (I also can’t believe that
you’re using Internet Traffic Report as “proof” of anything when all
it does is use a SINGLE POINT in any nation as a point of reference
for whether the ENTIRE COUNTRY is up or down.

By Internet Traffic Report’s measures, here are some other things that
are down:

Oh well…at least reading comments from people like yourself provides
some good humor.

Dave Schroeder
das [at] doit [dot] wisc [dot] edu
Posted by: Dave Schroeder | Feb 9, 2008 9:07:18 AM

even if i was on pirpous ham radio would spred the word like we did
with cherinoble…hams will allwas tell the truth… no govermint can
stop us ..
Posted by: Peter | Feb 9, 2008 7:38:37 PM

It would be counterproductive for Al Qaeda, since they’re all about
the propaganda videos & they really do have their geeky side with
their websites etc, I would think these groups would be last to want
their propaganda pipelines cut. Wouldn’t you need a sub to do stuff
like this? That narrows it to a handful of countries – or former
countries with large, rich, erm… ‘business interests’ with access to
abandoned military gear. I’m still trying to grasp the ‘why’ of it
all. Extortion?
Posted by: punterjoe | Feb 10, 2008 5:36:23 AM

Consider the possibility that it is connected to Iran going off petro-
dollars to petro-euros. Consider the scheduled opening of the Iranian
oil bourse. Then ask yourself which government would most hate for
Iran to go off the dollar.
Posted by: Evelyn | Feb 11, 2008 11:35:44 AM

I found a really great guide with lots of detailed pictures and quotes
Posted by: Taolf Sujat | Feb 12, 2008 9:38:39 PM

Ever since those cables have been cut, the number of spam messages I
have received has dropped to a fraction of what they used to be. Maybe
the cables should be left.
Posted by: vonbulow | Feb 13, 2008 5:04:20 PM

From the archive, originally posted by: [ spectre ]


Problem: You don’t have a human translator or other means to communicate.

Solution: The Phraselator(r) P2 mobile, multilingual translator lets you
talk to people in many languages through a series of pre-defined
phrases accurately translated by native linguists.

Result: You are empowered!

– User speaks a predetermined phrase
– Translated phrase is heard through
 the speaker

   * Voice Recognition…Speak a predefined phrase (shown on the
display/touch-screen) into the Phraselator P2 in English, and the P2
speaks the equivalent phrase in the desired foreign language. The
Phraselator P2 is speaker-independent, meaning it can have infinite
users. It recognizes any person’s voice in about three phrases, with
no user-specific voice training required. This flexible voice
recognition makes the Phraselator a cost-effective “force-multiplier”.

   * Touch Screen and Push Buttons…If voice recognition is not your
desired translation method, the Phraselator P2 has two other means of
translating; a color, LCD touch-screen and push-buttons.

   * Translation Accuracy… The Phraselator P2 displays which phrase
is selected for translation, so there is no question about what is
being communicated. It also offers audio and text verification modes
for times when you need extra assurance that the correct phrase is

   * Authenticity… Foreign language phrases used by the Phraselator
P2 are pre-recorded by human linguists, offering personalized,
authentic communication with non-English speakers when a live
translator is not available.

   * Other features… A headset can be attached to the Phraselator P2
for limited-hands use. And, when you need to communicate with large
audiences, you can connect the Phraselator P2 to a loud-speaker. The
Phraselator P2 also gives you flexibility to designate buttons to be
left-or right-handed. Its durable or “rugged”, weather-, water-, and
shock-resistant hardware also makes it very usable in real-world, on-
the-job situations.





Indian Language Revitalization
In an effort to revitalize American and Canadian Native Languages,
Thornton Media Inc, (TMI) a Cherokee owned business, has introduced
the Phraselator(r) Language Companion(tm) (LC) and the accompanying custom
Module Builder(tm) language revitalization proprietary software to more
than 55 tribes across the country. Native speakers have begun creating
Modules to teach their language. TMI has provided on-site training to
Native language teachers and speakers in widespread areas of American
and Canadian Native communities at minimal costs. Often, they record
among the last Native speakers of each language. With the Phraselator(r)
LC, tribes can have full control over the recorded language content
within their own communities. Recordings remain the property of the
tribe or speakers who create them and TMI provides the training and
tools to create and manage their own recordings for use on the
Phraselator(r) LC .

Thornton Media Inc. Don Thornton (Cherokee), a filmmaker in Southern
California founded TMI in 1996 to create positive images of American
Indians. Thornton is a former Indian journalist who also worked in
social services for many years. He created and ran the cutting-edge
American Indian Clubhouse in Los Angeles (from 1996 – 99), an after-
school program for Indian kids in LA, which the National Indian Review
referred to as a “bright shining light in urban Indian Country.” An
interest in neuroscience and brain development led Thornton to adapt
hi-tech language products to Native languages.

IE: “Pechanga Band of Luiseño Indians – Recording with Chairman
Macarro to put one Phraselator(r) Language Companion unit in the home of
every tribal member. Each unit will store the Luiseño language,
including songs, stories, words, phrases, fonts, etc.”

The Phraselator(r) P2 translation device uses speech recognition
algorithms, but is unlike previous approaches to machine translation.
While machine translation has been an active area of research since
the 1950s, most of the academic inquiry has been on the general
problem of phoneme recognition and universal translation. This problem
has proved to be more complex than initially imagined. After 50 years
of aggressive research, universal translation is still in its infancy.
Voxtec took another approach. Voxtec recognized that most application
areas that can benefit from human language translation have a specific
lexicon that can effectively be communicated using a predefined, well-
organized set of functional phrases. By changing the problem statement
to one of phrase recognition and generation rather than phoneme
recognition and universal text translation, Voxtec dramatically
simplified the solution. Voxtec has developed a pragmatic answer to
the real problem, and thereby implemented an innovative solution to
disruptive human-to-human language barriers. Voxtec believes this
technology, initially developed for the military, is more robust and
well-rounded than all other entries in the machine translation market
and that the Phraselator(r) translation products have immediate
application in the commercial market.


Historical Snapshot
The phrase-based translation concept originally was developed under a
Defense Advanced Research Projects Agency (DARPA) Small Business
Innovation Research (SBIR) grant. The great need for linguistic
services to assist the U.S. military in Afghanistan after September
11, 2001, accelerated the product’s development. Shortly after,
Phraselator(r) Model 1100 prototypes were delivered to U. S. military
forces in support of Operation Enduring Freedom. Since then, extensive
military use of the product has spawned exciting growth and
improvement, leading to a new generation Phraselator(r) model, the P2.
Learn about the history of the Phraselator(r) line of products through
our “historical snapshot,” a year-by-year timeline.

Phraselator(r) P2 application v2.6 with expanded phrase management
features, such as creating and reorganizing phrases directly on the
device, will be released this month. Voxtec continues to develop its
phrase library and recently released a Military Police Module with 900
phrases in Arabic, Dari, Pashto, Iraqi, Kurmanji & Urdu.

VoxTec continued to expand the Phraselator(r) P2 capabilities by
developing additional Modules and adding new languages to existing
Modules. In early 2005, VoxTec responded to the Tsunami in Southeast
Asia with a Disaster Relief Module designed to help U.S. troops, who
were providing relief in the area, communicate with locals. VoxTec
also conducted pilot programs in health care and construction

Based on field feedback, VoxTec continued improvements to its
Phraselator(r) line of translation products and in 2004 released the
latest model, the P2. The P2 was designed for better performance (long
lasting battery), durability, voice recognition and expandability than
previous models. P2s have been fielded to all branches of the
military, as well as civilian law enforcement.

Improvements were made to the Phraselator(r) model 1000 based on field
feedback from Afghanistan and an updated model 1100 was developed.
Phraselator(r) 1100s were deployed to Iraq and VoxTec conducted in-field

After the 9/11 attacks, Phraselator(r) development was accelerated, and
about 500 Phraselator(r) model 1000s were built and delivered to
military units in support of operation Enduring Freedom.

Marine Acoustics, Inc. (MAI), of which VoxTec International was
formerly a division, was awarded a DARPA  SBIR grant in January 2001
to develop a handheld Phrase Translation System (PTS). VoxTec named
the system the Phraselator(r) handheld translation device.

In the Spring of 2000  ten custom PTS were delivered to US Coast Guard
units for use and evaluation in the conduct of Immigration and
Naturalization Services (INS) boardings. The delivered systems
consisted of PTS software, and the McSpeak custom microphone/speaker
developed for use with the DARPA One-way PTS. The PTS was also used
and demonstrated in Strong Angel in the Spring of 2000.

In support of Maritime Intercept Operations (MIO), the DARPA One-way
was deployed to the Arabian Gulf July 1998.  The MIO-specific DARPA
One-way system consisted of commercial-off-the-shelf (COTS) hardware
and voice recognition and translation software. The language module
consisted of approximately five hundred phrases and words translated
into the four most common languages used in the Gulf: Arabic, Farsi,
Hindi and Urdu.

A two pound, 5×8 inch Toshiba Libretto 100CT with a 166 MHz processor
ran the software. A sensitive noise-canceling microphone was used for
speech input, and a small speaker was used for translation

The Defense Advanced Research Projects Agency (DARPA) Information
Technology Office (ITO) Human Language Systems has supported research
and development of one-way phrase translation systems since the late
1990s. The technology began as “text-to-voice” by the Naval
Operational Medical Institute (NOMI). English phrase text was typed
in, and a voice translation came out. Speech recognition was later
added to enable “voice-to-voice” one-way communication, meaning an
English phrase could be spoken into a computer, and a translated
phrase came out.  Designated the Multilingual Interview System (MIS),
the system was deployed to Bosnia 1997.


To order directly through Voxtec International Inc., first complete an
Inquiry Form, or call us with questions at 410.626.1110.

Voxtec has an exclusive value-added reseller arrangement with Thornton
Media, Inc. for the Native American language revitalization market.
Thornton Media is a Cherokee-owned company formed in 1995 to create
“Language Tools for Indian Country”. Thornton Media works with over 55
tribes and has developed unique product and service offerings for
native language revitalization. After listening to Thornton Media’s
unique hardware and software needs, Voxtec has modified its P2mX(tm)
translation systems and developed the custom-configured Phraselator(r)
Language Companion(tm) system. Phraselator(r) Language Companion(tm) products
and services are available exclusively from Thornton Media. Thornton
Media uses the Phraselator(r) Language Companion(tm), together with several
Voxtec customized software tools, to create their own unique product
and service offerings for native language revitalization. All
inquiries relating to native language revitalization should be
directed to Thornton Media. To learn more about Thornton Media and
their product and service offerings, visit their website at

Voxtec Phraselator(r)P2s are available for purchase through GSA and
Prime Vendor contracts.

GSA scheduled products are held to high quality standards and
standardized pricing that is already determined to be fair and
reasonable. GSA allows you to purchase several ways:

   * Charge Cards, GPC Card/IMPAC Card
   * Electronic Requisitioning
   * Internet, through GSA Advantage

How to Order Directly through our GSA distributor:

   * 800.948.9433: Call ADS, the exclusive GSA distributor of
Phraselator(r) products.

How to Order Through the GSA Advantage Web Site:

   * Go to the GSA Advantage Web site and search for Contract Number:
GS-02F-0238R, held by ADS. Go now!
   * Select the items and place them in your online basket. Feel free
to give Voxtec International, Inc.a call with questions about GSA
items: 410.626.1110


Voxtec International, Inc.
20 Ridgely Avenue, Ste. 301
Annapolis, MD 21401
Phone 1 (410) 626-1110
Fax 1 (410) 626.1112
info [at] voxtec [dot] com
sales [at] voxtec [dot] com



“Thank you for your interest in Thornton Media, Inc., the only
language tool company in the world devoted specifically to Native
Languages. We strive to bring you the most advanced and useful
technologies for your language needs.

The revolutionary Phraselator(r) LC will generate tremendous excitement
in your community for language revitalization. Join the 50+ tribes who
are using Phraselator(r) LC to bring their languages back to life. Take
control of your language future and contact us today!”

CEO Profile
Don Thornton (Cherokee) is a filmmaker in Southern California who
formed Thornton Media, Inc. in 1996 to create positive images of
American Indians. He is a former journalist (NAJA Member), cameraman,
producer, grantwriter and social service program director. He created
the cutting-edge American Indian Clubhouse in Los Angeles from 1996 –
99, an after-school program for Indian kids in LA (the largest urban
Indian population in the country) which the National Indian Review
referred to as a “bright shining light in urban Indian Country”

President of TMI and NDNTV
Don Thornton (Cherokee from Oklahoma)
don [at] ndnlanguage [dot] com

Kar Thornton (Kara) is a presidential scholar from the University of
Southern California. She graduated from the Annenberg School for
Communication and came from Singapore. She’s incharge of all the
marketing, PR, computer programming for the company, and speaks three
languages fluently.

Director of Marketing and PR
Kara Thornton

Cell: 818.284.1707
kara [at] ndnlanguage [dot] com

TMI’s Language Consultants

Terry Brockie is Gros Ventre from Montana. He teaches his language,
White Clay to schools in his surrounding areas and has been using
Phraselator LC for three years. His expertise is working with his
tribe’s elders to record their language into Phraselator LC. He even
asked an 80 year old elder to use Phraselator LC to record by himself!

terryb [at] ndnlanguage [dot] com

Keon Weaselhead is Blackfoot (Kainai) from Alberta, Canada. He
attended boarding school when he was five, after he left he relearned
his language and is now fluent. He teaches Blackfoot to his immersion
students (3rd graders). His expertise is getting his 3rd graders to
use the Phraselator LC software to record. He has been using this
method for more than 2 years.

keonw [at] ndnlanguage [dot] com

Phone: 1877 NDN TOOL (636-8665)
Mailing Address: P.O. Box 965, Banning CA 92220 – USA