Since this is the very first post on the Money No More blog, it probably stands to reason that I should try to layout, at least in high-level conception, what a new moneyless world should look like.
So right off the bat, let me provide a list of what I believe the top elements in the new paradigm would be. If it were not possible to achieve these, one could make a fairly good argument that nothing substantial would be obtained by the effort required to bring these changes about, and thus one could argue that the existing money system, as corrupt, evil, and harmful as it is, might be justified as continuing, albeit, under severe reform at a minimum (although I do not believe in reforming the current monetary system, and thus would consider reform measures as a special category of failure that does nothing substantial to actually correct the severe flaws inherent in the current model).
Thus, the new system
- should prevent the accumulation of vast wealth and vast debt
- should not allow for any means to produce profit, thus eliminating the profit motive entirely
- should not be subject to erosion or perturbation via inflation, deflation, stagflation, etc. as currently exists under present-day monetary models.
- should not produce or require taxes or tax revenue for the State, which has always been a burden on the citizen taxpayer
- should be as fair and equitable as possible, resulting in the greatest good for the greatest number of citizens
- should provide a means to care for those unable to work, such as the old or infirm, or other categories of people who require what today would be considered monetary assistance from the government
- should be equal to the task of creating the equivalent of capital, but not subject to the associated negativities therein (e.g., venture capital presupposes wealth being invested in hopes of achieving even greater wealth)
- should eliminate (or vastly curtail) corruption, bribery, influence peddling, theft, ponzi schemes, collusion, pyramid schemes, money laundering, embezzlement, fraud, insider trading, tax evasion, counterfeiting, and other means of perversion that are so very prevalent within the current monetary system. In fact, the ease with which the above examples can be achieved under our current system points very strongly toward the fact that the wealthy power-elite class do NOT want any change in the status quo for the very reason that it is so easy for them to corrupt the current monetary system and get away with it (either legally or otherwise).
So the above, at a very minimum, should be the goals set to create a more just and equitable means whereby goods and services are produced, while still retaining compensation for all those people who are productive and provide those necessities and luxuries enjoyed by modern societies. Such a new system would need to eliminate all parasitic elements from society and require that everyone labor in order to be compensated. This sounds strange, as one would expect that people do have to labor for their compensation. But that is NOT the case. In a capitalistic system, people do not necessarily have to labor. The system is designed to generate more wealth for the wealthy by creating more money from existing money (from interest, dividends, capital gains, etc), and this comes about by exploitation of resources, both human and natural. So the elimination of exploitation is a prime goal of the new system. Under the new system, the exploiting capitalist is out of a job -- he must go to work just like the rest of us.
In attempting to understand just how to achieve the new system, one must have a thorough understanding of how the existing system operates in favor of the wealthy class. Money is defined as a "medium of exchange". But what exactly does that mean? If one looks back thousands of years, prior to the invention of money, you will be faced with the most ancient system of cooperation between peoples -- the barter system. Barter is simply the trading of one good or service for another good or service. It works well provided both parties to the transaction have something the other party wants or needs. But what happens if this is not the case -- if party A has food and party B has tools? Party B might need food, but party A has no need of B's tools. The transaction is stuck under this barter system. But with money, a universally agreed upon medium of exchange for goods or services IN THE FUTURE, transactions can proceed unencumbered. Even if A has no need of B's tools, money allows A to purchase something else s/he DOES want or need at a future time. Money can be thought of then as a peculiar type of barter of sort. An exchange still happens as in barter, but the artificial medium of money allows for future useful transactions instead of only present-moment transactions that might break down in the barter system.
But the most basic of flaws with money is, in fact, its inherent exchange quality. For the exchange of money allows for its accumulation. With enough accumulation, one eventually enters the realm of wealth (and eventually even extreme wealth). This is only possible because of money's other key quality, that of its lack of expiration. Money has no end date at which time it ceases to exist. Because of this, money is capable of being handed down to generation upon generation. In theory, this can go on in perpetuity. So, one of the key characteristics of the new system must be that it does not require exchange or transfer in order to operate, and that the new medium does not allow for perpetuity as is the case with money today.
But how can these two key qualities of money be eliminated in the new system? There are a variety of substitutes for money that have been proposed. At this time, my current favorite for consideration is the Labor Voucher, Labor-time credit, or simply time-credit (which I like to call "tic" for short). The most basic aspect of the Labor Voucher is that it is a compensation for labor, as money is, except that it is based upon actual time worked (rather than currency) as compensation. Thus if someone works for one hour the laborer is compensated one "tic". If someone works a typical 40-hour week, they will earn 40 tics. By linking compensation to time worked instead of currency, it becomes impossible to accumulate vast wealth because although it is possible to accumulate billions of dollars, it is IMPOSSIBLE to accumulate billions of tics because people do not live for billions of hours. Additionally, compensation based on time rather than currency is not subject to inflation, deflation, etc. because it is impossible to inflate or deflate time. An hour is an hour is an hour. This sets a permanent standard in place instead of a fluctuating dollar based upon subjective interpretations of value established by the so-called "free market" and supply and demand.
But it would still be possible to accumulate tics (and thus vast wealth) from others under exchange or transfer, so the second aspect of the Labor Voucher or "tic" is that it expires the moment it is used to purchase a good or service. If something costs 10 tics, and someone pays 10 tics for it, those 10 tics instantaneously disappear forever. Labor Vouchers are NOT transferred. Thus they cannot be accumulated. They have a built-in means of expiration. No one can get rich with them. It is impossible under such a system. Labor Vouchers can be accumulated by the individual in strict accordance with the amount of time s/he works. Thus, if someone wishes to work themselves to death by working 80 hours per week, there is nothing that prevents that, and thus nothing that would preclude the stockpiling of extra tics above and beyond what one might need to survive. But nothing beyond the individual's own labor can be acquired. Vast stockpiles of tics, unlike vast stockpiles of money, cannot occur under the new system.
But this also brings up the practicality of implementing such a system. After all, if the Labor Voucher is destroyed after each initial transaction, that would be a lot of paper to clean up, since by design none of it can circulate (unlike our current monetary system which depends on circulation for its very basis of operation). This is where modern technology comes into play. Under this new paradigm, the most practical way of implementing Labor Vouchers nationwide (or even worldwide) would be via centralized computer(s). Under such a system, the computer is responsible for tracking hours worked and issuing electronic time-credits (tics) to an individual's time-credit account. When someone wishes to actually purchase a real-world item (good or service) they can use something similar to current-day card swipe (or possibly even bio-scan station) to debit/credit the account. Thus, all income and use of time-credits is purely digital. No one ever touches a time-credit ever. And it is of fundamental importance to realize that ALL compensation under this new proposal comes from labor. So a purchaser at a store has worked for his/her Labor Voucher to make the purchase, and the store worker providing the item for purchase is also being compensated with Labor Vouchers for the labor s/he is putting in at the store. S/he is NOT compensated via transfer of Labor Voucher from purchaser to the store. There is NO profit. Everyone works to earn Labor Vouchers from the central computer(s), regardless of where they work and what good or service they are providing.
The greatest objection to such a system is, obviously, that computer systems can fail and, thus, so could the system. The response to such concerns is that these computers, operating completely independent of both the Public and Private sectors, would have to be engineered to failsafe specifications (and housed in super-secure installations such as a Ft. Knox type of facility). There are computers running today on this planet that have been engineered under the most stringent standards possible, using triple and/or quadruple redundancy (including power supplies) due to the ultra-critical nature of their mission. Such systems as employed by certain areas of the Defense Department and the Financial Sector simply cannot fail. For them to do so would be catastrophic to the nation. So it is reasonable to conclude that such a system could be implemented with a high degree of failover capability that would ensure that millions of daily transactions could occur with a very high degree of reliability.
So, in conclusion, we can see that such a system is based entirely on EVERYONE contributing labor in order to be compensated. Time-credits (tics) cannot be used to generate more tics unlike todays money system whereby money can be used to generate more money via interest, dividends, and other capital gains. This would effectively eliminate capitalistic parasitic elements by design. If you want tics, you HAVE to work for them.
Future posts will discuss deeper aspects of such a system, such as secondary markets, how capital would be replaced under such a system, how the government would not require taxation in order to function, and other concerns.
