A Work-Standard Critique of Energy-Based Currencies

Based on the current literature, there are currently two conceptual definitions for what passes as an “Energy-based Currency.” One interpretation suggests that such a Currency is really a metaphor for Cryptocurrencies such as Bitcoin, which relies on consumption of electrical power to give itself Value. With electrical power, the Blockchain is allowed to function, turning itself into a generator of Kapital. However, there is another definition that is of interest in this discussion. The other definition was posited from a number of Environmentalists convinced that Neoliberalism’s responses to Climate Change are too slow and others concerned of the implications of Peak Oil.

To begin, I must direct the Reader’s attention to an earlier post. I stated how the concept of an “Energy-based Currency” was conceived as an obscure aspect of Fordism-Taylorism, particularly as an attempt by Henry Ford to challenge the Gold Standard. What I did not mention at the time is that, aside from Bitcoin, there has been a genuine attempt in recent months to implement an actual Cryptocurrency exhibiting the characteristics of an “Energy-based Currency.”

Solarcoin Symbol

The Solarcoin (SLR) is a type of Cryptocurrency whose Value is backed by the production of solar power. Anyone who can afford a solar panel or a solar plant will be able to participate in the production of a Solarcoin. Each Solarcoin is backed by 1 MWh (Megawatt hour) of electricity generated from solar power. As of this writing, Solarcoin is currently on an Ethereum Blockchain, and it remains to be seen if it will be as successful as Ethereum.

Aside from Solarcoin, the motivations shared by those in favor of a “Energy-based Currency” revolve around the premise that the Fractional-Reserve Banking System and the preeminence of Fiat Currencies after the Death of Bretton Woods could not have been sustained by Neoliberalism alone. Neoliberalism has to rely on access to sources of cheap energy to ensure a high standard of living. Having a high standard of living allows the Liberal Capitalists to proclaim the alleged superiority of their political-economic ideology over those of all other ideologies. Of all the natural resources destined to fulfill that role back in the 20th century, crude oil was proven to be the most versatile and the most reliable. A nation could harness it to pursue applications beyond a fuel source for vehicular, maritime, and aviation transportation.

Crude oil can be used to create petrochemicals, plastics, and even fertilizers. The latter in particular is especially crucial in supporting the large-scale agriculture production capabilities of most countries. Other nonrenewable resources include natural gas and nuclear fission. The former is more readily available than crude oil, whereas the latter lasts longer than crude oil and natural gas.    

Without access to cheap sources of crude oil, Neoliberalism will never be able to maintain its high standard of living. In fact, the ideology itself cannot even assert the Jeffersonian Empire of Liberty if it does not have ample reserves under its control. Let us not forget that the Stagflation of the 1970s was contributed by disruptions to the flow of crude oil and petroleum into the Western Bloc countries. The 1973 and 1979 Energy Crises saw huge Price increases and demonstrated how vulnerable Liberal Capitalist regimes can be once access to crude oil and petroleum is cut off.

That being said, what is the general proposal for an Energy-based Currency among its proponents? Given their ideological backgrounds, the proponents prefer it to be backed by the generation of electrical power. This electrical power is to be generated from renewable energy sources such as wind power, hydroelectric power, solar power, geothermal power, and so on. However, renewable energy is not the only ones being considered; even non-renewable energy has been contemplated at one point or another in relation to Climate Change.

From a Socialistic standpoint, both Marxist and non-Marxist, the Energy-based Currency concept represents an attempt to commoditize Climate Change by Liberal Capitalists. One recent example has been the attempt to introduce LCFIs (Liberal Capitalist Financial Instruments) exhibiting the characteristics of an Energy-based Currency and designed to commoditize humanity’s proliferation of greenhouse gases in the atmosphere. The LCFI was given the designation of “Carbon Credits” and was pioneered by the EU/NATO member-states in 2005 as the “Emissions Trading System (ETS).” The idea behind a Carbon Credit is to set limits on the amount of greenhouse gases emitted by heavy industries by attributing a Store of Value to their emissions. It would provide an Incentive for heavy industries to reduce their carbon emissions. Of course, the idea itself has hardly been effective, and the ETS has been criticized for not being reliable in providing tangible reductions among the targeted heavy industries.  

Another troubling implication is that Energy-based Currencies do not truly seek to challenge the Fractional-Reserve Banking System, let alone Neoliberalism. After all, some of the existing literature on the World Wide Web (WWW) have repeatedly suggested harnessing Blockchain Technology on the premise that their Energy-based Currency would serve as a suitable competitor to the proliferation of Bitcoin and other Cryptocurrencies. A true Energy-based Currency, according to its proponents, would parallel, if not outright replace, the Fiat Currencies by trying to follow in the paths blazed by Cryptocurrencies like Bitcoin and Ethereum.

A well-known example of this emulation of Cryptocurrencies is also European in origin. The “NRGCoin” functions similarly to Bitcoin but whose Blockchain does not involve having computers perform complex mathematical equations. Instead, its Blockchain involves privately-owned wind turbines and solar panels generating electricity for a nationalized power grid. The Value is to be backed by the production and consumption of those renewable energy sources under a contractual agreement. Similar to Solarcoin, NRGCoin also has yet to demonstrate itself as a viable competitor to Bitcoin or Ethereum.

From my readings of the Energy-based Currency, I am beginning to suspect that the concept for the most part is really an Environmentalist extension of Cryptocurrencies. I say this because most practical applications have been fulfilled by a combination of Blockchain Technology and renewable energy. The rest can be scrutinized as a misguided attempt to commoditize the creation of greenhouse gases associated with Climate Change.  

The critiques that I can levy against the Energy-based Currency concept can also be done by the proponents of the Gold Standard and the current status quo, the Post-Bretton Woods Debt Standard. As of this writing, the most viable renewable energy sources are wind, solar, hydroelectric, and geothermal. Solar power and wind power are both dependent on specific weather conditions that cannot always be guaranteed on a daily basis. Solar energy cannot be generated on a dark night, just as wind energy cannot be generated on a windless day. Hydroelectric energy is dependent on access to water sources such as rivers and lakes. And geothermal energy can only be generated in specific regions of the world where there is constant volcanic activity.

Meanwhile, Gold and Schuld can accumulated regardless of weather conditions and geographical climates. Even though gold ores are limited to specific parts of the world, that has not stopped individuals and nations alike from trying to stockpile some for themselves. But Gold itself is also a nonrenewable resource just crude oil or natural gas. “How much Gold is there in existence?”

As for Schuld, it can be accrued from all kinds of economic activities, not just from panning gold ores or building and operating renewable energy sources. It can be created from trying to live beyond one’s own means of production, and that means of production in question could be any economic activity conceived by human ingenuity. Yet there is one thing on Earth that humanity creates and is about as abundant as Schuld. This of course is the Arbeit that humanity produces.

One does not need to wait for the right weather conditions or have the right geographical climate to create Arbeit. The Work-Standard was specifically designed to operate in Western countries and non-Western countries, regardless of their spatial geography and weather patterns. One also does not need to have the latest digital technologies to make Arbeit. In fact, Actual Arbeit alone will suffice in the absence of Digital Arbeit, not to mention a slow connection to the National Intranet. Actual Arbeit can always be made on a stormy, windy night where thunderbolts are streaking overhead and heavy rain pouring over an Enterprise running the nightshift.

Shall I also ascertain how well an Energy-based Currency might fare under wartime conditions? Most conceptions of an Energy-based Currency rely on constant electrical power from renewable sources and uninterrupted access to a Blockchain. The Blockchain may be decentralized by dint of its design philosophy, but it is still dependent on access to the digital realm. If the electrical power were to be cut off by a cyberattack or an air attack directed at an electrical substation, an Energy-based Currency would lose its Value overnight. After all, wind turbines, solar panels, hydroelectric dams, and geothermal plants are too conspicuous. Under an Energy-based Currency, they will be targeted by enemy forces determined to diminish both the issuing nation’s military-industrial capabilities and its financial firepower, the ability to finance the war effort.     

Contrast that with the Work-Standard, where the creation of Arbeit can be decentralized and hidden behind a wide variety of inconspicuous locations. Arbeit can still be contributed to the Life-Energy Reserve at deep underground production facilities, garages and kitchens, basements and cellars, forests, hills, and mountains. It was because of this implication that the concept of Military Arbeit was devised in The Work-Standard (2nd Ed.) to identify the various ways in which nations could create Military Arbeit safely and discreetly. If a nation can successfully create Arbeit regardless of geography and weather conditions, not to mention in wartime, it should even be able to identify potential opportunities of creating Arbeit from economic activities that have yet to attached to a Domain within the Work-World.

Categories: Politics

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