I am just going to talk about what I have learned from others on this subject, come what may. Perhaps the ideas I impart here can lead to better ideas, when combined with the knowledge others possess. This thread was originally inspired by, and going to be a response to, the discussion in the thread “SAFE TV to expedite mass adoption”, although I feel that it deviates so far from the original subject as to warrant a thread of its own.
Money is not an integral ingredient of an economic system, only resources and labor are. Money has been useful as a tool to distribute resources and direct labor in ways to benefit society. The important aspect of economics is the production and distribution of goods and services. Money is a representational token of the value to society created by the economic activity, and it is useful for its fungibility. Money has no inherent value, its’ value is agreed upon only by social convention. In reality, all things are priceless and unique.
The incentive to exchange goods and services between participants is the primary use of a monetary economic system. However, the use of money has an inherent flaw, as money only has value in relative scarcity. If everyone had as much money as they wanted, it would produce no incentive. Even after our society has discovered the ability to employ machines to produce goods and services in abundance, money has continued to act to produce artificial scarcity in the economy through the competitive market system. While competition is generally considered beneficial to progress, if it is a matter of survival, competition frequently leads to disastrous consequences. This means that for as long as we continue to use the scarcity based monetary system to produce incentive to exchange goods and services, we will forever experience scarcity within our society. In situations where real scarcity does still exist, science and technology have generally provided acceptable substitutes for those scarce resources. In order to resolve these inherent issues, we would benefit enormously by creating an economic system that alleviates scarcity and allows for its participants to access the resources needed for survival, while still incentivising conservation and efficiency in order to preserve resources for the rest of society and future generations.
The way this could be accomplished is by providing each individual with the ability to produce their own “money” through a “proof of stake” system, and enabling exchange through a “blockchain-like” trustworthy economic system. For example, an individual would produce their own “income” as a declaration of intent to use a fair share of resources for their needs (i.e. the individual’s “proof of stake”). The individual would then produce value for their “proof of stake” by participation in the societal economy in whatever method that would be acceptable to other participants in this market. In order to eliminate the competition that monetary economics produces (relative scarcity), the individual would be able to “claim” each economic exchange for whatever value other market participants would find acceptable.
This is difficult to envision in abstraction, so let me provide an example to illustrate the idea.
Citizen X, an ordinary member of society, needs access to resources to survive. She obtains a “proof of stake” (a market identity) in order to coordinate access to validation of her economic participation. This “proof of stake” allows her to issue a “personal coin” for her economic exchanges. The “coin” is exchanged during the transaction with other “proof of stake” holders. Her “proof of stake” obtains value by the amount of other “proof of stake” holders that are willing to accept her “coin” in exchange for their “coins” in transactions. (The number of participants willing to accept your “coin”, essentially its fungibility, would be data stored within the “proof of stake” validation.)
This does not need to be an exchange as we know it today, simply being in the same geo-location as other people, or performing actions that are relevant to society could be turned into an “income”. This would allow for people to produce value for society in ways that our monetary system today cannot. It would be possible to reward participation in socially beneficial actions, as long as they provide a recognizable valuable to the people who are willing to accept your “coin”. You could be “paid” for any action you perform in society, from going on vacation, to spending time with your family, to taking a healthy walk or reading a book, even playing music or a game. Whatever action you get “paid” for is simply publically declared as your “income”, and your “coin” gets accepted by others, or not, on a purely voluntary basis, based on your “ledger” of past transactions and the criteria acceptable to the other party, which is also the criteria they set for themselves. This accords with the principle of treating others as you wish to be treated.
Let me illustrate this with a further example. Citizen X has become hungry. She goes to the “market” and finds another economic participant that “sells” apples as part of their contribution to society. The other economic participant, let’s call him Citizen Z, agrees to accept Citizen X’s “coin” based upon the history of transactions declared on Citizen X’s “proof of stake” ledger (available electronically through the exchange of “proof of stake” ledger data). Citizen Z has established this criteria by their own economic transactions, and the “approval” comes from comparison of the two ledgers.
In order to adopt this new economic system, we will need to be able to transition to it without destroying the economic system we currently use. This can be accomplished by allowing each participant in the transaction to declare their own value for the transaction independently from what the other participant of the transaction declares that value to be. This has the effect of eliminating the pricing structure imposed on resources and labor. The way it operates is that each participant in the exchange is able to declare the price for the goods or services independently from what the other participant declares.
Another example is needed to illustrate this idea more clearly. Let us presume that Citizen X, our first participant, has a handicap or other circumstance which debilitates them from producing an equal amount of labor and/or resources in service to the economy. In order to eliminate the competition inherent in the pricing structure, she is allowed to set her own price for the goods and services she uses. Again, since the exchange is voluntary between participants, this exchange can be accepted or rejected based on Citizen Z’s own criteria for acceptance, as established on his “ledger”. The point of this independant declaration of value is to destroy the “price discovery” mechanism inherent in the denominational market system. What is valuable to me, may not be as valuable to you. (Beauty is in the eye of the beholder, essentially.) When Citizen Z produces an apple, he may take great pains to acquire heirloom seeds, to provide proper nutrition to the plant, to keep pests away, and protect the plant from toxic chemicals and a thousand other minute criteria that probably has great value to society, while Citizen X may be just hungry and has an urge for an apple. In this way, Citizen X gets an apple, and pays an equitable portion of her income to acquire it, while Citizen Z is also able to sell the extraordinary apple he has produced, for an equitable price in proportion to the effort he has put into it, declaring it as an income against his “proof of stake”, and thereby contributing to the economy.
There are two essential ideas to take away from this conversation. Firstly, the monetary based economic system produces the scarcity we experience in our society, and the best way to eliminate it is to allow each citizen to declare an equitable income and account for their transactions in a way that encourages efficiency and conservation by publicly declaring their transactions. Secondly, value is a subjective judgement. Each market participant needs to have the freedom to assess the value of their exchange independently from the value placed on it by the person they are exchanging with. The publicly exchanged “proof of stake” ledger should be used as criteria to accept or reject transactions in place of individual prices on labor or resources, as is the case in the current economic system.
I know what you are probably thinking right now; “This is a nice pipe-dream, but my bank is not going to accept my token without some fiat monetary value attached to it. Taxes have to be paid in fiat moneys, and they will never accept my “declared” income as money.” And you would be correct. There is no way that banks, governments and institutions would accept this type of an economic exchange. However, remember that the established institutions are what you are supporting when you use the current monetary exchange system, and if you ever want to be free from that type of centrally controlled monetary system, you will have to find a way in which you can operate independently of them. The economic system I have illustrated is designed based on the mutual trust that can only exist for exchanges between one person and another, and it can provide all the necessary resources for survival in and of itself. People have the need for food, shelter, medicine, transportation and communication, all of which are able to be provided by other people in the type of economic system I have presented here. Even though this system could someday provide for the needs of all people, it cannot do so immediately. Instead, it is possible to sell the labor and resources we produce in exchange for fiat currencies, as we do today, while using the new economic model to produce additional value for society beyond the limitations of the monetary based market system. It is possible to operate both systems concurrently, providing an abundance to those who operate in both systems, and providing the essential resources to those who would otherwise be excluded from the scarcity based market economic system.