Power to the people. ARCC and financial autonomy for the urban poor
The 19th century Russian philosopher and novelist Fyodr Dostoyevsky wrote, “Times of crisis, of disruption or constructive change, are not only predictable, but desirable. They mean growth. Taking a new step, uttering a new word, is what people fear most.” Amid the omnipresent corruption, social injustice and institutional hypocrisy that blighted 19th Century Russia, Dostoyevsky, alongside literary contemporaries such as Chekhov and Tolstoy, lamented how attempts to modernise Russia were incessantly derailed by corrupt officials and sycophantic advisors in the Tsar’s court. Only a seismic, protracted and unprecedented event, World War I, finally stirred the largest nation on earth in ‘taking a new step’ in 1917.
While it remains to be seen whether the Covid-19 pandemic represents a key turning point in the 21st century, a topic that we will return to in further detail in another article, what is clear is that the speed, extent and scope of the pandemic has rattled global institutions, financial markets and society to their very core and, at the very least, has provided an opportunity to reflect, ut totum, on our global monetary and financial infrastructure.
Countries in Southeast Asia, where ARCC intends to provide debt-free capital to over 300 million people, have already unveiled fiscal and monetary stimulus packages. For example, earlier this month, Indonesia, the largest economy in Southeast Asia, announced a secondary stimulus package worth $8.1 billion which included measures such as tax relief for some manufacturing workers, a 30% corporate tax discount and refunds for value added tax. In Thailand, the central bank has cut interest rates twice in one month to a new record low of 0.75%. Similar measures have been replicated across the region.
This top-down centralized monetary and fiscal approach, while predictably mirroring the actions of previous responses to crises, does not address deep-rooted economic imbalances that have built up over years, nor does it address the longer-term economic repercussions of the pandemic. Indeed, the very term ‘stimulus,’ to define these measures, is somewhat misleading as they are more akin to ‘emergency recovery’ packages to prevent widespread, immediate-term foreclosures and defaults rather than planting new seeds for future growth.
Further, it is debatable to what extent the fiscal and monetary stimulus packages evidenced in Southeast Asia will actually have any impact on ordinary people. Quantitative Easing supports capital markets but does it actually put food on the table tonight for millions of vulnerable, poor people in urban communities across South East Asia? Tax breaks, state support for industries and tax refunds benefit companies, not the workers, and certainly not those who are already marginalised, vulnerable and excluded from the centralised system. The potential for food supply chains to be disrupted will cause inflationary pressures at a time when central banks have limited tools in their arsenal to manage any such rises in the price level. Rising food prices at a time of surging unemployment will create widespread suffering amongst the urban poor in Southeast Asia. The retrenchment and unwinding of globalisation, which arguably had already started before the onset of Covid-19, but now looks set to hasten as countries close their borders to manage the spread of the virus, will also likely drive prices even higher.
While we are not critiquing the actions of central banks and governments, the risk of doing nothing would have been greater than the risk of action, that still does not preclude us from asking how did we arrive at a point where the antidotes provided to the economy to weather this global pandemic was, yet again, further monetary and fiscal stimulus. The stimulus packages unveiled so far, there may be more to come, will have untold economic consequences for years to come. National debt will rise, taxes will increase and government spending on infrastructure, health and education will fall.
At IBMR.io, we believe in a novel approach to achieving economic development, wealth creation and asset accumulation in Southeast Asia; one that is decentralized, inclusive and bottom-up. We are also pragmatists. We do not believe in some utopian economic order that is completely decentralised. We are the first to concede that central banks will continue to have a key role to play in the global financial system. Complex and deeply rooted problems, despite what sometimes we are told, do not have simple solutions. At IBMR.io, our focus is on identifying a nuanced social impact solution to the perennial problem of poverty while working alongside the current centralised system rather than espousing a hyperbolic solution of replacing the entire centralised system with a decentralised order. Our mission at IBMR.io is to create a decentralised information network that rewards users with ARCC for completing socio-economic surveys. The ARCC that is earned, or mined, by users through Social Proof of Work is subject to a 3-year vesting schedule and as such represents debt-free capital for entrepreneurial investment and value accretion. By being positioned as a macroeconomic ‘regional crypto reserve currency’ and a microasset, ARCC’s value is maximized via the inflow of funds from underlying regional investments as well as a 50 year token monetary policy.
Rising national debts will hinder future growth. The American journalist Garret Garrett, writing in his 1932 magnum opus ‘A Bubble that Broke the World,’ noted how there are only three ways to deal with national debt: growth, inflation or write off. Our goal at ARCC is to solve financial exclusion and wealth disparity through growth. By solving systemic corruption through the Public Mandate Network and providing debt free capital on a financially inclusive basis to 300 million people across South East Asia, we will achieve long-term urban productivity and economic growth. In earning ARCC as a cryptocurrency and understanding the implications of decentralisation, these emerging markets will find their full potential by skipping a generation in technology where individuals create decentralised conglomerates that provide financial inclusiveness while being equally competitive.
Amid the sea of sadness of the pandemic’s effects, one ray of light is how self-isolation is providing communities with an opportunity to reconnect with each other. Networks across countries have sprung up organising supply chains, sourcing medical equipment or delivering food. These self-driven, non-centralised distributed networks are forming a patchwork of alliances across countries, providing vital assistance to vulnerable people days ahead of central government bureaucrats. The Austrian School economist Hayek wrote in ‘The Road to Serfdom’ “the more the state “plans” the more difficult planning becomes for the individual.” At ARCC, we believe the time has arrived to provide financial independence and security to millions of people who, hitherto, have been excluded. The time has come for individuals to plan for individuals.
26 March 2020
Research of IBMR.io & ARCC
Editors: Eric Tao, Head of Media IBMR.io & Sinjin Jung, Managing Director IBMR.io.
