Fluidity Economic System

Executive Summary
What is Fluidity?
Fluidity is an economic system of credits used in hybrid with a national economy
to precisely stimulate, grow, manage and improve the economy according to goals of

sustainable economic growth

social inclusion and cohesion
responsible environmental stewardship

Sustainable outcomes are achieved on the basis of secured and increased economic growth,
stability and resilience. Stimulus must precede transformation. Fluidity can be used to create
sustainability on all levels: economic, environmental and social. In the process, if applied correctly,
it can transform the metric that is GDP into one that allows us to bequeath a better world to future
generations.
Fluidity enhances and accelerates existing positive trajectories outcomes. It slows and halts
existing limiting economic factors, as well as similar and sometimes associated trends in regard to
environmental and natural resource management. Fluidity addresses economic causes and
corollaries associated with behaviours that are damaging to the social fabric. It allows opportunities
that are currently being wasted to be taken and potential that is currently undeveloped to be
realised. Overarching all outcomes associated with Fluidity are robust enviro-socio-economic
goals.
Modelled on the principles of natural ecosystems, Fluidity works at the scale of national
economies. It can also be adapted for smaller or larger spheres.
The Status Quo
Current economic systems have developed piecemeal, during different periods of the past, by
individuals who are no longer alive, for sets of circumstances that no longer apply. They do not
take full advantage of technological systems that have now become available - and which are
increasing in complexity and sophistication at an ever quickening rate. Currently the systems we all
rely upon and which determine major events in our lives do not start from desired outcomes and
work backwards in order to determine the inevitable logical structure needed to achieve them.
Instead our economic lives are built on the unknown interaction of a set of processes that is without
oversight or overarching benevolent design. This is a nonsensical state of affairs. Manmade
systems are made by human beings, for human beings. If they need improving, it is our ability and
responsibility to do so. We need an economic system that looks forward, designing the near future
from the vantage point of an economically sustainable future.
Fluidity Platform Options
Depending on the country in question, as a reflection of the available technological delivery
platforms, Fluidity has two different expressions:
In developed countries Fluidity will make use of credit card style swipe cards, the Internet, and
smartphone technology.

In countries with less sophisticated infrastructure1 Fluidity will make use of SMS mobile phone
platforms and transfer systems similar to M-Pesa, which was designed for Kenya to help ordinary
people move money across the country without having to transport physical currency.
Fluidity uses technological platforms now available and the power of big data in a way that
economic systems so far have not even approached.
What does it do?
Economic behaviour shapes environmental and social outcomes. Fluidity is used to facilitate
improved economic, environmental and social outcomes. Fundamentally, Fluidity engineers
changes in economic behaviour by (differentially) allocating credits to participating individuals,
businesses and organisations, and then steering exactly where, how and when those credits can
be spent.
Automated in-depth analysis of outcomes-versus-allocation parameters provide the basis for an
ever more robust data-driven feedback loop to be established. Adjusting parameters over time
allows the achievement of desired outcomes to be made more specific and refined.
In developed countries, Fluidity acts as a hybrid system in concert with the national currency, such
that each participating transaction comprises a currency component and a Fluidity component. The
name of the Fluidity currency is Luka. As an example, an item that would ordinarily cost 10 may
cost, at the discretion of the merchant, 1 Luka + 9. (L1:9)
In this way the spend on each participating product or service is geared at certain ratios between
Luka and national currency. This ratio is the Gearing Ratio2. In the above example, the Gearing
Ratio3 is 1:9.
Every actor in the system benefits from participation in terms of wealth (defined as the ability to
access products and services) and then in terms of cash wealth. Only bona fide transactions will
be included within the system - products and services that uplift the agreed upon outcomes, i.e.
those representing above average effect on the same. Because of the economic benefits provided
to participating merchants and service providers, other transactions by inference will be
disadvantaged, decreasingly profitable, and decreasingly attractive - both in the moment of
transaction and in anticipation thereof. Even before long term direct effects, this alone will start to
shift behaviours, as merchant providers realise they will become wealthier by doing the right thing.
Because no physical currency will be issued, there will be no possibility of counterfeit. The ICT
platforms developed will be watertight, developed by the worlds leading cryptography experts. All
system-generated data will be anonymised and form a database that provides information that is
key for system improvement, for actors who innovate best practices, and for policy makers.
With a purely electronic currency it is possible to do something impossible with a physically minted
currency: engineer a quantum leap into each transaction. The buyer can spend 1 credit, but the
merchant-provider can receive more than 1 credit into their account. A quantum leap has occurred,
one that introduces another layer of organic growth into the system.

It is also worth noting that upcoming innovations mean smartphones will become globally ubiquitous (HSBC 2015).

It is important that the Gearing Ratio is set by merchants and service providers, because we are crowdsourcing
economic solutions, utilising the power of thousands or millions of personal innovations to develop the best practice
economy through complex heuristics - iterations of trial and error. This will form a self-improving shared human neurology
of transactions. There needs to be room for innovation, trial and error. This will lead to original best practices.
3

Intricately associated with the neurology of transactions is the neurology of behaviours; it is this latter perfectable
architecture that we utilise to inform the flow design of the neurology of transactions.

GDP - Stimulate and Transform

The value of money is that it can be exchanged. GDP is a rate, not a countable commodity. Higher
GDP is secured by increasing the velocity of money in an economy, not by creating more money,
nor by causing the consumption of more natural resources than the previous year.
Higher GDP triggers a slew of positive psychological and then real world factors such as increased
consumer confidence, increased lender confidence, increased borrower confidence, higher
investment from within country and abroad, urban regeneration, growth of the middle class,
expanded tax base, investment in schools & hospitals, etc. If this confidence can be sustained liberated from traditional manic-depressive boom-bust cycles - a society and not just an economy
can enjoy truly sustained growth and become extremely attractive to sustained investment. If the
programming both at the core of the new system and at the implementing agency truly have the
long term interests of the nation and the people at heart, they will enjoy the high praise of current
and future generations.
While GDP must be stimulated, it is currently a confused metric that includes destructive practices
on the same balance sheet as beneficial ones. Fluidity first stimulates GDP and economic stability,
then facilitates the transformation of GDP into a measure that truly befits future generations.
Fluidity can be seen as a liquidity pump, one that is very precise, complex, programmable and
almost infinitely adjustable. Sustained increased velocity will increase the value of the national
currency associated with Fluidity. Not just quantitative but positive qualitative changes will occur.
In order to further incentivise cycling of the national currency, at least some credits can be given a
temporary lifespan, evaporating after a period of, for example, six months. The precise evaporation
curve embedded can be first estimated and then honed through statistical analysis of empirical
data provided by the system once in operation. (The same dynamic is true for all Fluidity
parameters and system responses.)
In developing countries, transactions will be made and account balances accessed, by mobile
phone SMS platforms (and Internet where available). Instead of geared credits, whole-cost credits
will be allocated to individuals and organisations, in alignment with the system-wide ecosocial
goals developed in the early phases (ecosocial is the nexus of sustainable environment,
sustainable economy and sustainable society).
In these developing countries, parameters available to the system software include:

Differential allocation sizes,

Evaporation, and
The ability to generate increased currency flows in specific sectors and regions at significant
times - in response for example to macroeconomic or stability-related events4.

Improved Incentives
Why do people make bad decisions? It is largely because of poor incentives, and compromised
decision-making landscapes - the lack of better options or the perceived lack thereof. Fluidity
affects this landscape by stacking it with short-term incentives that are aligned with the long-term
interests of everyone - including the environment, which equates to everyones interest in the
future.
In essence, Fluidity is a system of constantly improved incentives. Based on analysis of
behavioural science, it has been carefully developed in consideration of the positive short-term
interests of all actor classes. Each actor involved will engage with Fluidity in order to improve their
wealth and their access to needed and desired resources and capacities.

History shows that trade can be a weapon of Peace.

What kinds of credits are allocated? To which people and organisations?

Different amounts of credits will be given to different actors, in order to incentivise specific fluid
exchanges of national currency, and to drive the associated desired socioeconomic outcomes.
Example one: rewarding a non-profit organisation and its officers who are doing frontline work in
resolving conflicts or protecting vulnerable members or groups in society.
Example two: making preferential allocation parameters to financial institutions that have an
impeccable ethical record.
Example three: incentivising a sector or product or service type associated with increased (above
average) sustainability - be it economic, environmental or social sustainability - in order to drive
adoption by bringing the unit cost down in a way that will remain low even when Luka are no longer
associated with that product or service. (This is similar to the way that Feed In Tariffs are deployed
for the renewable energy industry.) Thresholds to economies of scale are broached on a
permanent basis, and the price remains low thereafter.

Development and Implementation

For any iteration, Fluidity has four phases:
I. Planning
1. Research & Consultation: analysis of socio-environmental status quo
2. Development of ecosocial goals
3. Analysis of pre-system economic flows. Blockages and missing bridges?
II. Development of the System
1. Development and adaptation of the systems needed to underpin Fluidity
2. Highly effective communications and marketing campaigns
III. Implementation
IV. Ongoing Adjustment and Improvement
Phase I - Planning
The process of planning for a Fluidity system begins with in-depth research & consultation, careful
analysis of the socio-environmental status quo, and development of the holistic ecosocial goal
states desired in that country or region, by and on behalf of that sovereign people. All of these
stages are indispensable. Also essential is that the goals are holistic - serving economic, social and
environmental goals; and that these are well integrated both conceptually and practicably.
When this stage is complete, Stage 3 of Phase I is accurate analysis of current economic flows.
Where are the blockages? Where are the missing bridges? How will changes in economic
behaviour improve social cohesion and cooperation, stabilise the economy and help it thrive,
reduce the stress placed on the environment and natural resources, and uplift disadvantaged or
disenfranchised individuals or groups? What are these needed changes?
Phase II is development and adaptation of the systems needed to underpin Fluidity and provide
success. This means adaptation of hardware systems and development of software that will
provide data, analyse data, and then, responding to the data, allocate credits and adjust
parameters around these allocations, thereafter on an ongoing and somewhat self-improving basis.

When the existing economic flows have been analysed, the necessary actors will be courted for
adoption of the system, via highly effective communications and marketing campaigns. This is the
last of the Phase II development steps.
Phase III is Implementation, the roll-out of Fluidity via differential allocation of credits.
Phase IV - Ongoing Adjustment and Improvement
The software architecture behind Fluidity will use one or more algorithms not only to
match allocations to the desired outcomes selected in Phase 1 but also to improve predictive
ability. (All effective ecosystem models work on this basis - analysing early predictions against
actual outcomes, then improving the model to improve their accuracy.) Mobile telephone and other
ICT enterprises will make excellent partners in this regard.
What are the outcomes?
The human brain can remember no more than seven things at once. Modern supercomputers with
high powered algorithms are not limited in this regard. Chess computers are able to beat human
world champions. Addressing our most complex problems via big data and intelligently
programmed algorithms that are self-learning via feedback loops will provide solutions that
individually we cannot imagine. Because the model or algorithm on which the system is designed
can be improved, because it becomes more powerful the more transactions that are included
within the system, because actors develop more and more effective wealth-generation strategies,
over time the system become better and better at achieving outcomes. Economies will be made
more stable and abundant.
Environmental stability is significantly correlated with social stability. Economic stability is the basis
for wealth generation and sustained social inclusion and cohesion - in turn driving truly long-term
economic resilience.
Conclusion
Given the existing technology and trends, one or more systems similar to Fluidity, using big data
and very powerful software, will inevitably come about in many countries around the world, within
the next decade or so.
Once this inevitability is realised, the question becomes not whether such a system should be
implemented but by whom, and in what way? The issue perhaps becomes the urgency of applying
such a system in such a way that nothing less holistically focused and benevolent can become
established.
The highest-good outcome will be to implement such systems with the highest integrity in mind and
most inclusive possible social function, because according to the First-To-Market principle, once
Fluidity is established, less ethical and less inclusive models would struggle to take root.
Developing and implementing Fluidity systems correctly will serve the maximum number of people,
future generations, and the silent majority that includes Nature and natural resources. Let the
outcomes be enlightened, developed and implemented with the true wellbeing of all implicit at the
core level. Let dispossessed and disadvantaged people be fully included and protected. Let Nature
and natural resources be fully included and respected. Let national sovereignty be fully respected.
Let the rights and democratic desires of all peoples be held sacrosanct and enshrined accordingly.
Andrew Fynn is a sustainable development expert with a background in communications and
marketing. He has written policy papers for UN FAO, World Bank, OECD and other agencies.
Fluidity is based on his work with regeneration of natural ecosystems and sustainable agriculture.
https://uk.linkedin.com/pub/andrew-fynn/13/a22/a37