Contribution-based economy (and money standard)

Gold standard, oil standard, fiat money, etc. all these 'standards' seem to be misleading and not producing a stable economy. When money is linked to a type of resource, economy becomes dependent on the production of this resource and its fluctuations. This ultimately causes wars for resources or risks of economic collapse when the resource depletes or its production halts due to some reason (or when it is over-produced). Like in ancient times when empires were dependent on gold and silver mines. Now, when you use fiat money, then the system depends on conventions, which can be manipulated by wars, access to insider knowledge, ratings, etc. But what if we use contribution as the basis for the economic value of things? Let 1 man-hour be the basic unit of economic value according to the current technology. In this model, value has clear meaning both for the management and for the consumers. Also, accumulation of wealth becomes ridiculous, because what does it mean to 'have' 100000 man-hours? Also, man-hour units go very well with crowd-sourcing. The cost of resources can be calculated as the number of man-hours required to produce, transfer, and store 1 unit of the respective resource (e.g. 1 oil barrel or 1 kg of gold).
In terms of non-material goods, it opens even greater possibilities because information can be easily copied. So, if 1000 people contribute artistic work 10 man-hours worth each, then any of the participants can get access to the total of 999*10 man-hours equivalent of artistic work. This way, you are basically not selling items, but getting access to items in return for your contribution. To sum it up, you get access to material things in 1:1 proportion, and access to non-material things in (N-1):1 proportion, where N is the total number of equivalent contributions on the market. Of course this is only a general idea, not in any way a theory. But what do you think of this general approach? What are its benefits and drawbacks, in your opinion?

reply to post by mrkeen

Also, accumulation of wealth becomes ridiculous, because what does it mean to 'have' 100000 man-hours?

Interesting idea, kind of like barter system.

Would it not mean the same as it does now? Those hours are worth goods right? The very rich accumulate more money then they could ever spend in a lifetime, they would still do so. I suppose you could fix some of this by not allowing anyone to pass on the hours to someone after they die. No lasting empire is then buildable.

reply to post by mrkeen

Barter is fine but, if you try to enforce a non-currency system you will simply push the 'free market' into the 'black market'.

The reason for leaving precious metals as the de facto currency (not a system as such but, the default naturally scarce and valuable currency) is to ensure the portability and fungibility of accumulated wealth. It also protects against the catastrophic hyper-inflationary failures that inevitably occur with all fiat monies.

If you don't believe in wealth then communism is your only choice but, the free market always exists. It cannot be subdued, you just force it underground.

Let me explain why I chose time (spent in production of goods or services) as the basic unit of value. If we look closer at the concept of 'value', we can see that it is rooted in human values. Physical objects do not have any intrinsic value. There is a lot of gold or hydrogen in the Universe, but these substances do not have any specific value, they simply exist. We, humans, attribute value to things, and there are two sides to it. First, we see an item as valuable according to our tastes and needs. Secondly, we believe that the more effort it takes to produce something, the more valuable it is. Tastes and needs are too volatile and subjective to form a countable economic metric. On the other hand, the effort that needs to be applied by a qualified professional is a metric that is already used in business plans and production cost estimates. It only changes as more advanced technology becomes available. Compared to money as it is known in history, the proposed model has the following fundamental difference: it removes the idea that value is 'contained' in physical objects. Anything that requires no effort to be produced or maintained, has no economic value in this approach. But it can have other values, such an aesthetic value, etc.
As for such units being accumulated, I don't think it's a major problem, because one person can't produce significantly more effort than the statistical average, and without derivatives and debt-based assets you can't collect too much of this money equivalent. Most likely you will have to spend most of it during your lifetime, and this can also be viewed as a means to stimulate the economy.

In the same manner an inventor makes a model before he constructs the full-sized machine; the chemist wastes some chemicals -- the farmer wastes some seeds and land -- to try out an idea... creating a new money system must work on a micro scale in order to be viable.

First, I would also suggest that the technology be decentralized so that it is not reliant on a trusted central authority (think of Bitcoin as a good example). Second, it should be dynamic (or responsive to the needs of local communities).

I think it is good and healthy to rethink the whole question of money, more people should do that. With the rise of crypto-currency (and various "Alt-Coins"), that is exactly what more and more people are doing....

Separation of Money and State

How might we reinvent money so that it is both a store-of-value like gold, and would not be controlled by political structures that could use it to wage war? This two-fold question is one that few people have ever bothered to ask, much less attempted to answer. While others were still trying reform a failing system, a mysterious hacker actually came up with the answer. From Wikipedia:

Bitcoin (BTC) is a cryptocurrency first described in a 2008 paper by pseudonymous developer Satoshi Nakamoto, who called it a peer-to-peer, electronic cash system. Bitcoin creation and transfer is based on an open source cryptographic protocol and is not managed by any central authority.

Buckminster Fuller once said, “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” This is exactly what Satoshi has done. Calling Bitcoin a “disruptive technology” is an understatement. Money unmoored from any central authority is the new model. As the old money that political structures depend on becomes obsolete so will the political structures themselves.

While most people don’t think about it very much, we could say money makes us slaves to the system. That may sounds rather negative, and even melodramatic, but when we re-frame the problem in terms of computer technology, solutions begin to emerge and bitcoin is one very positive answer.

What we are seeing unfold is a world in which political structures of control are collapsing. With Bitcoin, pyramids of power are becoming as flat as a pancake. People are reclaiming their power from false authorities, and individuals are taking back their own sovereign birth-rights.

greencmp
reply to post by mrkeen

 

Barter is fine but, if you try to enforce a non-currency system you will simply push the 'free market' into the 'black market'. The reason for leaving precious metals as the de facto currency (not a system as such but, the default naturally scarce and valuable currency) is to ensure the portability and fungibility of accumulated wealth. It also protects against the catastrophic hyper-inflationary failures that inevitably occur with all fiat monies. If you don't believe in wealth then communism is your only choice but, the free market always exists. It cannot be subdued, you just force it underground.

Help me flush out my thoughts on this subject:

What Principles Ought Money Retain?

There are two principles that I hold, but they may be in conflict with each other:
1) If you want to have honest government, demand honest money (gold, silver, bitcoin, etc).
2) With the technology we have today, money and the law, need no longer be two separate things.

This second principle opens the door to social engineering by the State and as you said, the free market cannot be subdued, it would only be forced it underground. So then, the question is this: if a money system became the Law, would it also become a tyranny? Sadly, I think the answer is yes. However, seeing this danger I still wonder if it could be done in such a way that the free market thrives and the false authority of a central authority is held back from any mischief.

Reform Money, Reform Society

Yes, with the technology of today, we can reform the social order by reinventing money... but before such a task is undertaken we would do well to understand the proper role of the Law... and it primary aim: to protect the rights of the individual. Only after we understand that life, liberty, and property are individual rights, can we then begin to apply technology to reform our current money system.

My copy of The Law is filled with highlighted yellow phrases. Among them:

"Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.”


...nothing can be more evident than this: The law is the organization of the natural right of lawful defense. It is the substitution of a common force for individual forces. And this common force is to do only what the individual forces have a natural and lawful right to do: to protect persons, liberties, and properties; to maintain the right of each, and to cause justice to reign over us all."

Written in 1850, just two years after the French Revolution of 1848, the Law was an appeal to the French people reminding them of the proper sphere of the law and government and begging them to turn away from their descent into socialism. As the last vestiges of the class-society were replaced and the new "democratic" order was being instituted, the State was more and more being used as a means by which groups of citizens (special interests) could plunder one another through taxes, transfer payments, tariffs, etc, committing what Bastiat calls "legal plunder."

As he saw it, the law was being perverted into a so-called "creative" entity, through which controlling groups would seek to enforce their particular agendas at the expense and through the pocketbooks of the people in general. Personally I appreciate his definition of plunder as "...tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on..." My advice to anyone reading this.... go read 'The Law.' It will change all your assumptions about what the role of government/money should be.

greencmp
reply to post by mrkeen

 

If you don't believe in wealth then communism is your only choice but, the free market always exists. It cannot be subdued, you just force it underground.

www.heretical.com...

Surely the Government is in control of the country and its supply of money? Surely money is only a symbolic token to facilitate the production, exchange and distribution of goods and services? Not so, say the Third Positionists, who reject both Capitalism and Communism... Nowadays banking has become extremely sophisticated but the hidden and usurious mechanism behind it remains the same.... The next stage of development for international finance is to get rid of cash altogether...Who benefits from such a scheme? The politicians or the bankers? To ask the question is to answer it.

So the question remains, how might we reform our money system so that individual rights are protected and the so that the false authority of banking elites are no longer rulers of the Earth.