Re: Future currency

From: R. W. (
Date: Wed Jan 24 2007 - 11:50:38 MST

The only true scarce resource we have is the lack of applied will to action. The whole premise of my rant is that current society is good but it could be truly great if we applied more of the latent intelligence available. I may be naive but I believe at some point in the near future we will be able to convert energy and inert matter into usable products and services at nearly no cost. In the advent of this capability, we need to adjust our scarcity model of economics to one of abundance. People will have to be educated more on what to do constructively with all of the time and resources available in this new paradigm. I posit incorporating more of individuals' inputs into an aggregated center, analyzed, and delivered to administrators and other facilitators and to the general public to determine actual pricing of items based upon the time and energy requirements to make them. I will include credit in this program as I stated before -- I do not mind being indebted to
 society if everyone else has to as well. I despise having to make myself indebted to a few unknown people who create "money" out of thin air when everyone in society has to depend on this meme. I think a better unit of currency would be the joule-second. Everything is made of energy and it costs time and energy to transmute one state of energy into another one, so why not use our aggregate intelligence to determine what that energy cost is and price it accordingly? You could use all of the current mediums of echange and then some, just as long as they are fungible and have an energy conversion ratio.
  I imagine Experts in the field of endeavor would have a higher weighted vote on what the actual price should be than a say a lay person. For example, a soybean farmer would probably give me a better production cost for soybeans than a real estate developer and vice versa. The actual price someone is willing to pay should be left neutral as opportunity is still a function of time if the item becomes scarce during a production cycle. I call this nascent idea "market democracy". I'm sure it needs a lot more work but the functional structure takes advantage of proven aspects of market intelligence and capitalism. In summation, we need more capitalism by generating more capital (the ability to solve a human want or need) through the latent, unused intelligence of our society by aggregating our voices, minds and will through communication networks, computer systems, AI and better education models.
  Personally, I'm scared of a fully conscious AI so why not apply our aggregated minds to individual and group problems as a society. 300 million minds of all different capacities each have a unique perspective. Even if the individual's answer to a given problem is wrong, it gives the total society a better picture of what is really right.
  As to the opportunity to be indebted to someone -- Why would I want the opportunity to be indebted to someone if I had a choice otherwise? Why would I chose to be a slave instead of a co-builder if I have a choice? Why be the butler instead of the teammate?
  If I have no other choice, then I will be forced to decide upon dependence or death.
  Again, I may be immature and naive, but I'd rather be dead than be a slave. Ultimately, in order for me to be free of my debt, someone else has to become indebted to me. I'd rather be a co-builder than a slavemaster. I'm sick of the pyramid scheme. A geodesic dome gets stronger with increased dimensions -- i.e. increased population. It's a geometric analogy of society, but an important one in the difference in what you suppose for humanity and what I'm proposing. I could be wrong; but I can accept that.

Kevin Peterson <> wrote:
  On 1/11/07, R. W. <> wrote:
  "Credit" is a deliberate misnomer. You don't receive credit. You are given debt. Debt in full excess of whatever it is you may wish to possess. You are given the opportunity to be indebted to whoever creates this ephemeral "money" which is literally created out of thin air with nothing but ignorance backing it. They sell you an illusion so you can get "stuff" and then once you pay they have more credited illusions to give some other sucker.
Credit is not a misnomer. Credit is the prearranged opportunity to borrow (and take on a debt). Just as you are better off having a job, you are better off having credit. Having a job entitles you to nothing but the prearranged opportunity to sell your labor at a given price.

Of course, credit does have two meaning. There's a credit to your account meaning you have received money, and there's a credit line, meaning what I mean above. But have any sort of option is always worthwhile.

What is important with regard to money is not what it is based on. No doubt a Roman legionnaire would laugh if someone tried to pay him in promises, but I don't think you'd appreciate being paid in salt. Similarly with cigarettes in prisons.

What is important with money is what you can exchange it for, how convenient it is to engage in transactions with it, the expected change in the value of the commodity over time, and the uncertainty of the change over time. We already have currencies diverging somewhat. Consider the differences between cash in my wallet, money in a checking account, and money in a CD. They all have different advantages and we exchange one currency for another to optimize.

Money isn't going to go away until scarce resources and separate entities controlling those resources with differing interests go away, because money is the most efficient method of allocating scarce resources. Even under communism, the factory managers had to resort to barter systems in order to keep things running as smoothly as they can.

Improved technology, meaning lower transaction costs and lower cost of information, opens up even more exotic forms of currency. Our current monetary systems could not exist without the ability of banks to communicate (the ... reserve rate? is that the name for the fraction of deposits held? would have to be much higher).
What's missing in the original post considering things like "usable energy" is that we've advanced to the point that we don't need to say "I'll give you 10kwh for that pack of cigarettes" and I have to, I don't know, give him a can of gasoline. A currency based on power would be exchanged just as any other, and the unit of account would probably have a defined location and medium, like 10kwh of electricity at the point of generation at X power plant. But I'd still pay my electric bill, and it might cost me 30kwh to have that 10kwh delivered to my home. Since the value varies at a given location, the currency can be stabilized by instead pegging it to 1kwh credit is 1/100 of a kwh at any of 100 power plants. You could establish such a system by contracting to buy power from the powerplant (in your kwh$), sell it to consumers (for kwh$), and also make loans to people (in kwh$ for kwh$ interest), thus increasing the money supply beyond what can actually be produced.

I don't think the goulash currency example is that likely because we are so good at basing currency on nothing. The only way I see that as likely is if there is no single currency in sufficient supply.

Oh, first time poster. Software engineer in California, studied some cognitive science and economics at school.


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