HOW IT WORKS: other facilities

As part of the obligations government places on NEMs operators, there should be a mandate that all information about market activity is made publicly available. Here’s what it might look like for a babysitter.

This dashboard is showing our babysitter there’s a shortage of supply in her area at the weekend right now. Predictably, rates are higher at those times. But a lot of those bookings are at short notice. Is she willing to respond to that opportunity? It’s entirely up to her.  Does annualised demand for childcare in her area indicate demand is likely to go up or down next month? Perhaps she could profitably expand her travel area? Maybe she could make more money in markets other than babysitting given her qualifications and patterns of availability? Clicking on My Opportunities will provide all the answers.

Macro-data is also freely available. Want to know how many NEMs transactions happened yesterday? What percentage of the population is currently registered? The value of all fish farming related purchases in last year’s first quarter? Just ask the system’s Market Data page.

Availability to sell need not be binary. Many of us can only be available for work if certain criteria – which the system can check – are in place. NEMs can allow a user to set up their own rules and then apply those rules to period of time. For example, someone selling in the market for scaffolding work might set up a rule that availability in that sector is dependent on:

• His wife being available for work, but not booked. If his time is purchased she is to become unavailable because she’ll be looking after the kids
• NEMs being able to hire him a van for the duration of a booking
• The country’s meteorological website showing no rain expected, he can’t put up scaffolding when it’s too wet. If it is wet he’ll trade as a decorator, carpenter or taxi driver.

Having input a rule, he can apply it to any period of time he likes. He can have an infinite number of personal rules covering many different offerings in the market. NEMs will prioritise opportunities according to his instructions.

NEMs has to have a means of transferring cash electronically between buyers and sellers. That could be through access to a conventional bank account. Or, if a user wishes, NEMs may act as a “narrow bank”, offering its own account. It might then allow electronic cash to be lent to, or borrowed from, other users based on each person’s aptitude for risk. Sites like Prosper(US) and Zopa(UK) already do this. NEMs might be an alternative because:

• It’s more heavily regulated, all its programming has to be transparent for example
• The system’s fixed charge across all markets is likely to be lower than the costs of using a single function site
• It knows more about each user: including their financial record, verified identity and history of trading activity – borrowers may wish to use this data to access cheaper loans
• A user’s trading record in NEMs has tangible value, like their driving licence, it will be downgraded if they fail to payback

Someone selling sporadically through NEMs will have irregular cash flows. They might want to iron out the irregularities. NEMs can help with an auto-lending facility.

At some point a user is going to want physical, rather than electronic, cash. NEMs can facilitate cheap, fluid, community banking. Imagine you have $50 in notes that you want deposited into your online NEMs account. You go to NEMs and look up Community Banking. It shows you a map of nearby individuals currently providing that service.

Go to any of these service providers, offer your $50 plus whatever the person’s transaction fee is, say 50c. Sitting next to a PC with a web browser, she will transfer $50 from her NEMs account to yours. The system will confirm that she has done so and display a partial password that only you know, if you don’t see that she’s probably faked the screen.  Her next caller may want to withdraw $80 from his online account. He authorises NEMs to put it in her account, she sees her partial password. He is given $80 minus her fee.

Not willing to travel to a NEMs community cashpoint? There could also be a market for doorstep banking: providers who come to you in minutes with a handheld computer. Doorstep banking may be just one of dozens of sectors in which those people are selling their time at the rates of their choosing.

 
NEMs should constantly analyse market activity. It can display aggregated utilisation ratios (the gap between hours offered and hours bought) of bakery assistants in Birmingham or book-keepers in Boston. Those gaps can be used to create investment products. Assume there is a very high rate of farmhand purchase in a particular area, 90% or more of qualified milking parlour operatives’ availability is being purchased within a few hours of being listed. Rates in this area are higher than the national average. But suppose there is a corresponding over-supply in the market for labourers with only 40% or so of hours booked.

NEMs could set up a fund available to any labourer wishing to be trained in how to operate a milking parlour. It would invite any putative to contribute as much as they wished. The system would then:

• Send a message to sellers in the relevant labouring market who had proven reliability asking if they would be interested in training as farmhands at investors’ expense. If they accept they would have to pay back a proportion of their increased earnings for the following 6 months and input a minimum number of hours of availability in that time.
• Offer those labourers that accept a slot with a seller in its market for accredited agricultural skills instructors .
• Assuming the worker qualifies as a farmhand, they are then monitored to ensure they list the minimum hours stipulated. The percentage share for investors is automatically deducted and aggregated in the fund.
• As workers accept the offer of training, the fund caps the offer to avoid over compensating. Once the six months is up, the fund pays out in proportion to each investor.

This is the basis of a range of potential investment services: sales of fund places, funds-of-funds, rolling funds, and so on. They are not mere finance driven creations. This is investment in anyone who chooses to sell through their country’s National E-Markets system.

Aside from the bulk of its trades, which would feature electronic cash transfer, NEMs could operate an economy using its own digital tokens.  These points are trickled out to each user and could be used to purchase from any other user that would accept them as a medium of exchange. We call these points POETs: Parallel Official Economy Tokens.

Assume each user received a one-off 1,000 POETs into their account over their first 2 years after registration. Usage may be restricted, for example it may be that a seller can only offer to be paid in POETs in low level markets such as ironing and similar household services and if the buyer lives within 1 mile. This might encourage new activity for those with little cash without detracting from the main economy. POETs could be particularly useful if the country’s main currency was unstable, for example because of financial speculation.

Facilities like those above specifically drive markets based on small transactions. NEMs allows small resources to be bundled up into personalised large transactions. It’s done through the website’s ability to link across its markets and instantly deliver a package from multiple sellers for a buyer's requirement. Here’s how it could work.

•  About legal frameworks