ID money

Can an identity be worth it's weight in gold?

If you're dying for a beer, entry to the bar is free if you're driver's license says you are over 21. if not, you dont have enough money to buy a beer, no matter what else is in your wallet. Who you are in the transaction, also matters in a political economy.

In our modern world of Credit and Debit cards, where the medium of exchange doesn't actually change hands permanently, these 2 things can work together.

Who you are when using a credit card matters. A card is simply a pointer to money, rather than the money itself (be it credit or cash in some bank accounting system). And this pointer is determined by the identity of the card holder. hopefully for the merchant, the card holder is the same as the card user.

Libertarians tend to hate pointers to wealth, as it undermines their feeling of sovereign power. it's hard to protect your wealth with a gun if someone else can remove your pointer to wealth. Fiat cash more anonymously is a pointer to wealth and can be diluted/manipulated by governments, and even a metal coin is a pointer to the wealth of something you can eat (though arguably, metal contains within itself past labor and capital required to mine it).

credit cards have the card holder's name on it, and must be signed for, or some other secret password be used to pass this pointer wealth from buyer to vendor. More recently within the past decade, even a photo can be placed on the card. Credit cards are looking more and more like driver's licenses every day.

in fact, if the credit card company issues a card to someone they have proof of their identity, including birthday information, if they included that on the credit card, would it be considered a valid ID to get into a bar? I'm not aware of the legal implications of this, but if not technically legal, i suspect could be made legal with a little friendly lobbying.

In order to raise money in these financially difficult times, I dont see any reason why the DMV wouldnt want to embed a Visa/MasterCard into a drivers license. or are these things sacred, like getting into a bar?

anyhow, on with the conflation of money and identity. consider this new initiative in oakland:

ACORNs - City of Oakland ID Money

Alternative Currency for Oakland Residents and Neighbors

…An Oakland Merchant Credit System/ID as Local Currency…

BY WILSON RILES, JR

A number of groups in Oakland are organizing around a residential ID card. The City and County of San Francisco has voted to implement one in August. The principle motivation of the San Francisco effort and those currently involved in the Oakland effort is to make more real the “sanctuary city” concept for the “undocumented.” It is believed that a City ID would provide the “undocumented” an official document that would be useful in many circumstances that you might imagine: opening bank accounts, verification for credit, resident identification for neighborhood security situations (the police departments generally support such efforts), etc.

In order for an ID card to be successfully implemented for such purposes, however, the card would also have to be of some value and use for those who are “documented” residents also. Otherwise, such an ID card would only be used by the undocumented and it would simply identify a person as an “illegal” and increase rather than decrease vulnerability. This is the experience with the Consular Cards distributed by the Mexican government. Consequently, in San Francisco they are considering having the ID card there also function as a discount card for some City services such as libraries, zoos, and public transportation. Note that San Francisco, being a City and a County, has direct control over more of these kinds of public services than Oakland does. In San Francisco, some are also thinking of incorporating a prepaid credit card into their ID.

I think that Oakland can do better than that by fashioning a card that would be of great benefit to all the residents of Oakland. Only a narrow slice of the resident population uses the zoo, the libraries, and other local services in the control of City government. It is not the cost that keeps most Oakland residents away from these services; it is interest and the availability of alternatives activities that they can also afford. In addition, only a slice of the low-income resident population bothers with discount cards or prepaid credit cards. Most folks really do not need another credit card option. My suggestion is that we address the roots of one of Oakland’s most intractable problems: totally permeable economic membranes.

My suggestion is that we combine the ID concept with the concept of a local currency. You could title this either a “merchant credit system” or a local, virtual, Alternative Currency for Oakland Residents and Neighbors (ACORN). In other words, we would call that local currency the “ACORN.” This captures a local prosperity/growth concept for the currency. The United States has a rich history of local currencies. [If you are not aware of this, check out - for example - the following web site: http://www.schumachersociety.org/local_currencies/currency_groups.html. There are local currencies in Ithaca (N.Y.), Berkshire (Mass.), Humboldt (CA.), Lawrence (Kansas), Floyd (Virginia), Calgary (Canada), and many more places in this country and around the world. There are more references at the end of this piece.]

The “big boys” use currency trading not only to hedge against inflation and trade fluctuations but also to amass assets; a local currency would make some of those options available to the City of Oakland and the “little guy.” An additional important benefit is to keep more resources within the micro-economy of the City. Currently Oakland has the lowest “multiplier rate” of any city in the Bay Area; that means that the money that flows into Oakland “turns over” very few times before it flows out into other communities. Local currency significantly increases the “multiplier rate.”

Past attempts to address this problem included attempting to have more City employees live in Oakland, thus expecting them to spend the public dollars from their paychecks in Oakland. [The State constitution does not allow Oakland – unlike some cities in eastern states – to require employees to live in the boundaries of the City.] Oakland has discussed using incentives to achieve this local residency of City employees. The City also instituted various weak “hire Oakland” programs. We have made major efforts to attract major retail outlets hoping to capture more of the retail dollar that leaks outside of our community; for many reasons this has not worked well enough either. [Part of this problem is the lack of resources and attention that is paid to small local businesses: the business sector that has proven the most capable of benefiting and benefiting from local prosperity.] Local merchants’ groups struggle with the City to promote Oakland businesses’ buy-local advertising programs. Some local merchants are currently considering a pre-paid VISA card to promote the Oakland “brand;” the ACORN ID-currency card has many advantages over this pre-paid credit card idea.

Oakland’s attempts at attracting meeting/convention business and tourism has also had limited benefits because tourists simply take BART over to San Francisco to spend their money. If Oakland does not correct for this problem, no amount of convention business, housing development, or office development will improve our local economic situation very much over all. I think that the development of a local currency will be of immediate help. In the tourist business for example, the City, hotels, or visitor sites, as a promotion, could give tourists ACORNs to stimulate their expenditures in Oakland.

In addition, one of the largely unspoken criticisms of the “undocumented” is the millions of dollars that they send to their home country (remittances) that are taken out of the economies of local communities. [This criticism does not take into account the money immigrants spend in the community that might not happen if they were not present to do the work at the compensation levels that are offered.] If the work of employees in Oakland were compensated – at least in part – in ACORNs (accepted for goods and services by Oakland restaurants, retail stores, etc.), this would be a huge boost to Oakland’s economy – producing more local jobs and allowing higher salaries in the local services economy. More of the income earned in Oakland would stay in Oakland. This would tremendously increase the “multiplier effect.”

In San Francisco, the I.D. ordinance attempts to respond to the need that more individuals than the “undocumented” should have these ID cards to make them effective by allowing them to be used as discount cards at libraries, the zoo, the golf course, and for transportation on Muni. Oakland would tap into a larger number of activities by making the ID card also function as local currency. Dr. Raul Hinojosa of UCLA estimates a huge multibillion dollar development potential by working more justly with immigrant residents. Oakland could tremendously boost the local micro economy by paying City employees partially in ACORNs (giving them an ACORN credit/ID card). If just 10% of City employees’ pay were paid in equivalent ACORNs, the current budget deficit of approximately $30 million dollars would be covered and approximately $30 million dollars would be injected into Oakland’s local economy, guaranteed. This would lessen the pressure to lay-off needed City employees.

If the City accepts ACORNs for the payment of parking fees, fines, business licenses, development fees, etc., this will facilitate the circulation of the ACORN in Oakland. The City could encourage the hiring of Oakland residents and many other things by encouraging businesses and others to accept ACORNs and by giving them a cut in costs if they pay by ACORNs. The City would lose little since the greatest economic problem in Oakland is the loss of the economic “multiplier effect” that will be corrected using the ACORN cards.

With the participation of a local bank or financial institution, a magnetic-strip card that could be used in the current card reader technology could be easily implemented. This bank or financial institution would also be able to provide currency exchange services with US dollars as well as with the currency of other cities and other countries. This includes exchanges with the Native American reservations associated with the significant population of people from indigenous tribes that live in Oakland; Oakland has one of the highest concentrations of indigenous people west of the Mississippi. Most of the accounts (checking and savings) of the previously undocumented would probably be placed at this institution in addition to the processing of remittances. City and School District employees will want to open up other accounts in the financial institution that also has their ACORN account. The People’s Community Partnership Federal Credit Union has shown interest and is researching regulatory restrictions. This program is in agreement with their corporate mission.

In addition, local currency would encourage intra-Oakland business-to-business commerce. This would benefit the small and people-of-color businesses in Oakland more than the chains, thus stimulating more local ownership success. Businesses, which “got on board” with this early, would have “a leg up” on lagging businesses in competing for these resources.

The Hass School of Business at UC Berkeley, and business schools and economic departments from Stanford, Mills College and other nearby education institutions could constitute an Oakland ACORN “Reserve Board” to monitor and control the ACORN currency for the benefit of Oakland residents. The “Reserve Board” would also be responsible for the financial education of resident adults and youth. The study of the workings of the local currency could be beneficial to our youth to learn and understand economics at a deeper level than most. The participation of the School District in this educational effort as well as in compensating Oakland teachers – at least partially – in ACORNs would give a huge boost to the success and prosperity of the community. Oakland could truly become a “model city” in every way, including through its economic system and its educational system. Members of the Oakland Unified School District Board are currently considering this proposal.

There may even be uses for the local currency to benefit Oakland’s international trade position, as the fifth largest port in the U.S. Traders may – at times – want the option to denominate their trade to the U.S. in a currency other than the U.S. dollar. In addition, because of the hugely diverse international resident population in Oakland, establishing currency exchange rates with other countries would facilitate more small businesses and local residents getting involved in the international trade business. Making true what I think Oakland’s permanent slogan ought to be, Oakland, Home to the World.

There is some controversy regarding city ids. This particular effort is born out of the idea to bring illegal immigrants into the mainstream, for their own benefit and safety. though this pointer to identity can be used politically against them, on the balance, i suspect it's better for the participants.

Anyhow, this idea that who you are (a resident) affords you economic privilege (discounts) is an intriguing way to manage political economies. Despite this effort being a lot about localizing the economy, I can see how a Muslim credit card could disallow purchase of alcohol.

For while this pointer is used at the point-of-sale, it's also the point of control, from a political economic perspective. I wonder if this will be a defining way of managing overlapping political economies in the future.

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5/28 update: wilson's local currency initiative to create a local oakland currency has stalled in the city council. while they think it's interesting, they didnt understand local currency well enough, or have a good enough example, to move forward with this proposal. If the decision makers had more knowledge about municipal script from the 30s, i wonder if they would have pushed this forward.