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What Is A Democratic Rationalist: 

Rationalism is the belief that all persons understand and recognize inherent truth and a knowledge of the truth exists in all persons. Democratic Rationalists argue this inherent truth is moral and focused on eliminating debt and ultimately manifested in the building of democratic institutions (teams). Democratic Rationalists believe team building is best done through an economy focused on increasing the equity of the organization and by extension the planet and that such a focus will produce transactions closely approximating what is known in economics as a rational exchange. 

There is general agreement that all persons understand right from wrong though disagreement as to what right and wrong is and how to measure it. Democratic Rationalists believe everyone, everywhere at all times possess a sense of value or understanding of the values of things based on our innate understanding of number or the concepts of more and less. It is from this foundation that we derive the concepts of better and best, good and bad and right and wrong. These values become quantified in economics and made manifest in currency. So in a very real sense the ability to exchange goods and services using a medium of exchange that quantifies value is inherent in human beings. Democratic Rationalists believe that team building is best expressed in business and business is developed by means of democracy.

Economics is built on and stems from the most basic characteristic of mankind - our ability to understand and express value. This ability forms the foundation of morality. We have an innate sense of what is good in a numerical and economic sense. We have a sense of value in terms of the moral good but also in terms of economic value. We all prefer lower prices to higher ones and we are all capable of knowing when something costs too much and when we are paying costs created by someone else and this we know is wrong. Excessive costs are by implication a creation of debt because we are paying for something we did not get or for nothing. Rationality is a discovering of protocols that prevent the formation of social costs, these are costs that are inversely related to rational exchanges and are inherely inversely related to the team building process. Exchanges ensure rational exchanges occur by systematically eliminating social costs.  

What is an economic rational exchange: 

A rational exchange is the standard model for a business transaction. All business activity should strive towards and seek to replicate a rational exchange. Ideally a rational exchange is an economic transaction that benefits both buyer and seller equally: if all information was known and all details pertaining to the transaction was possessed by both parties and the exchange perfectly transparent the transaction would still be completed. This makes a rational exchange a moral action. A rational exchange implies no hidden costs or fees. Rational exchanges eliminate all extraneous costs and this produces equity or assets freed of all liabilities.

What is Economic Rationalism:

Rationalism is the belief all pesons have inherent knowledge. Economic Rationalism is an economic theory based on the philosophy of Rationalism. Democratic Rationalism is a version of philosophical Rationalism that postulates all persons have an innate ability to recognize quantitative value and have a rational preference for lower costs and that this is best acheived within a democratic institution. Democratic Rationalists believe all persons recognize the value of democracy. The theory also predicts that immoral actions create higher costs and ultimately produce debt and this produces some degree of tyranny. Economic Rationalism is the economics of democracy.

What are Social Costs: 

Social costs are expenses created by the avoidance of costs. Social costs are costs downloaded onto society and future generations. Social costs are costs created by one entity that are externalized onto a subservient population. This can only be done when some degree of tyranny exists. The regulatory framework favours one social group over another. Regulatory environments are never rational in that they pre-empt moral choice and democracy. Social Costs include pollution, unemployment, debt. Social costs cannot be reconciled with rational exchanges. Rational exchanges are those transactions that are or would be completed if both parties had perfect knoweldge and thus could and would choose the right course of action.

What is the structure of an Exchange:   

Exchanges are democracy building institutions. They have the form of a credit union. Exchanges are composed of clients whole pool resources to promote mutual prosperity and rational exchanges. Rational exchanges constitute moral transactions in that no debt is produced and both parties are equally benefitted by the transaction. Exchanges are flat organizationally speaking. They are organizationally simple because team building creates no social costs. Teams are the natural way humans organize. Exchanges do not need or permit debt. Executives are voted in by the team. Power remains at the base of the organization.

What are rollars:

Rollars are units of account used by an Exchange and serve as an internal currency. The use of rollars allow Exchanges to exchange goods and services without risk. Exchanges guarantee the exchange of goods and services at the lowest cost and the highest convenience giving consumers the most choices.

Rollars track and secure the economic activity of members. Rollars are used by members to purchase goods and services from the Exchange. The Exchange serves as a Third Party Clearing House between buyer and seller. The accounts of the Exchange always tend towards zero as the credits and debits of all transactions made by all members cancel each other out.

The inputs of one member cancel the outputs of other members.

Rollars can be given a material (paper) existence if desired or digital tracking can be used. Rollars are or represents the equity of the Exchange. As the Exchange acquires equity rollars are created and as the equity is consumed or liquidated in finished or completed transactions the equity is paid down. Read more about money

How To Start An Exchange:   

Exchanges are easy to start using the protocols of team building. Exchanges are rational and moral and systematically reduce debt. 

Take a look at the Beef Exchange program as a typical team building protocol. Beef Exchanges reduce waste in the beef supply chain lowering costs.

What is a Network:

We all participate in networks of one kind or another. Exchanges transform informal networks into formal or monetized (Capitalized) networks.

Networks are informal organizations often within and existing parallel to the formal organizations that permeate society. Informal networks are natural and spontaneously generated organizations that can be tapped into and used to lower costs, debt and increase the equity of the planet.

Informal networks can be considered nascent teams.

Informal Networks: 

To set up a conventional business investors pool capital and register a business name while hiring a lawyer to draw up a formal legal partnership. One person, usually the primary investor will assume the role as CEO and the rest other management roles as well as having physical duties depending on the nature of the business and its size.

The success of the formal commercial network depends on the abilities of the business owner and how she or he assembles his or her leadership team. If the process if done well the people hired to run the business will be the same ones that employees look to for guidance, if done badly employees will create a shadow democracy.

Where the informal and the formal organizations are at odds with one another the workers will be poorly motivated. However the problem is the disconnect between the formal organizational structure of the business and its informal leadership. The regulatory authority of management has become divorced from the real locus of power centered on the shop floor. No matter what managment tries to convey authority remains in the hands of the formal leadership team and this regulatory fact paints all its efforts with the brush of hypocrisy. The fact that so much energy is expended trying to motivate employees means the formal regulatory network is in conflict with the informal one.

Exchange structure is always internally consistent. Consider the steps taken to move an informal network towards a formal democracy. Our scenario is based on a group of people who want to save money on firewood. Some members of the group may be used to cutting their own trees and splitting their own firewood others purchase their firewood from vendors. The provision of firewood is disorganized. There is waste. The cost of providing fireword in money and time are high. An Exchange is a democratic way for people to work together to lower costs.

Those who purchased firewood from independent vendors may start to purchase it from members of the group who cut their own, alternatively they may help cut wood for a share of the wood cut. This can and is done informally between people already. Democratic Exchanges moves the group towards a more formal way of doing what is already done naturally.

Friends help one another naturally. No formal accounts are kept but each person has an idea as to who owes who; who has helped who and who is owed a favour. However social networks have no formal or objective way to determine or record the value of each person's contribution compared to what they have been given. There is no formal accounting so there is always the possibility of free riding.

In an informal network this sort of flexibility is accepted. Some free riding is tolerated. An Exchange is a formal way of helping one another and needs a formal way to keep accounts. Formal methods of accounting gives social networks the ability to move to a new level of organization, create more specialization and lower costs.

The formal accounting of an Exchange makes it beneficial for people to help one another in specialized ways. Exchanges use an internal system of accounts tied to the equity created by each participant so each person is rewarded for what they contribute and debited for charges levied by others. The Exchange serves as a clearing house for all transactions and a storehouse of value that eliminates risk for the group. This encourages each person to do what they do best and this is the source of specialization. Specialization is the source of all increases in productivity and lower costs.

An Exchange may be created to provide firewood. The Exchange uses rollars as an accounting tool and internal currency. In a fully functional Exchange logs are purchased by the Exchange from one member. The invoice is paid using units of the internal currency. The Exchange simply deposits funds into the members accounts equal to the value of the purchase made. Some members or participants are hired by the Exchange to split the wood. These members are paid using rollars. Funds are deposited into their accounts. When the Exchange purchases the logs it aquires an asset representing equity.  If the logs are worth $5000 then the Exchange has acquired an asset worth $5000. The logs represent the equity of the Exchange. The Exchange issues 5000 rollars to the seller of the logs as a credit. The shares issued are backed by the equity possessed in the form of the logs.

It is important to understand the accounting and currency of an Exchange to fully comprehend how Exchanges function.

When the logs are split more value is added to the Exchange so more shares are created and paid to those who created the value to the Exchange by splitting wood. They add equity to the Exchange and are paid for the work they do in rollars. So shares (or rollars, the monetary units used by the Exchange) are always fully backed by the equity in the Exchange that is rollars equal and are represented by the equity created. Rollars are a fully backed and secure currency. Those who buy wood from the Exchange have their rollar accounts debited. Those who provide the wood have their accounts credited. Accounts in the Exchange and the rollars in existence always tend towards zero. Debits and credits as represented by rollars and the give and take of team economics always balance out or equal zero. 

See our related website ... Burning Firewood

and our blog Rational Exchange




Exchanges can be set up using the assets within your Social Network. Exchanges Capitalize Social Networks. Social Network resources are turned into the basis of a business. In the above example any group of people has the resources to create a business selling firewood simply by capitalizing what the members have. Capitalized Networks or Exchanges spontaneously create jobs and never go bankrupt. Capitalized Networks are devoid of risk. Exchanges can be started anywhere by anyone that is by anyone in any Social Netwok. Download the book Human Rights - Legal Rights here.













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