The conceptual GeoFlux currency

Projects Digital Abundance Network
,
64

Do you have any specific suggestions? Perhaps something like oil, energy, food, basic services, electronics, real estate, financial products?

Are you claiming that your use of the attribute “stable” for a market does not include the aspect of the market not being volatile? If yes, I find that at least slightly misleading.

Sure, the data security problem and the young age of bitcoin might be the most dominant reasons for its lack of ubiquitous acceptance, for now. In the long run, however, I think that the factors I’ve written about will gain in relative importance and determine the rate of acceptance of new cryptocurrencies, once crypto has been generally accepted and the security issues have been dealt with to a sufficient degree. Perhaps GeoFlux might be seen as preferable currency in 20 years or so.

Is that so? I think this is a key question. Having your preferred store of value and currency of exchange being one and the same thing initially sounds like a preferred solution, and pretty simple. But if the ideal store of value and the ideal currency of exchange differ from one another, it would make sense to have them as separate entities which can be optimized for their respective function independently.

While thinking about this issue, I am realizing that people want more than a “store” of value. They want their value to increase, ideally reliably, quickly, and without effort. So, perhaps we also need to think about what the best safe automatic investment could be. If we aimed for really good safety, we might want to have something like “world economic growth dividend shares”, which might be approximated by a portfolio of government bonds. Still, that doesn’t seem better than having some amount in a universally accepted, non-inflationary currency. The value of that currency would increase with economic growth anyway, if the amount of currency in circulation doesn’t increase. If the amount of circulation decreases (non-uniformly), there is the risk that you are the one who is losing some of that currency, so the safety requirement is violated here. My guess is that bitcoin will be pretty close to being an ideal store of value, if the safety issues are addressed, and if fluctuations of the value of bitcoin become minimal.

I’m not trying to beat bitcoin as long-term storage of value here. But I’m trying to create a better currency of exchange. What’s most important for a currency is its universal acceptance. A good currency needs to be easy to handle, and everyone should accept economic transactions in that currency. Let’s assume that bitcoin became trivially easy to handle. If cryptocurrencies also became nearly universally accepted, would there be a reason to reject any particular cryptocurrency? I think there are three classes of such reasons:

  1. Technological capabilities: Some cryptocurrencies have useful features that others don’t have. Flux currencies support continuous value transfer, for example (well, at least in theory).
  2. Design features: How is the currency created? What mechanisms affect the currency? Inflationary currencies, and currencies with unconditional demurrage wouldn’t seem preferable, everything else being the same. Proof of work can be considered as waste of energy.
  3. Social considerations: By using a specific currency, I am buying into the value network of the users of that currency, thus validating the value that is held by the members of that value network. People can have preferences which value networks they might want to support. If they have strong dislikes about certain value networks, they might reject its preferred currency.

Social considerations might feel week as an overall factor, but they are present. Some people prefer to use local currencies for such reasons, for example. Also, there are ethical banks, whose existence at least points to social reasons having a real economic impact. Currently, people usually strongly support the early investors when buying into a cryptocurrency. That can be seen as justified, or as necessary evil, or as inherently unfair – depending on your preferred point of view.

At the very least, a reputation-based currency would at least have stronger social validation within the reputation network that uses that currency. If there is a global reputation network, the question whether people accept a currency coupled to that network breaks down to whether they like the idea of a reputation based economy or not. It’s not trivial why people should value a reputation based economy over a conventional economy, but the argument that a first encourages digital abundance, and generally reduced costs, should at least convince the majority that it’s a really good idea to prefer reputation currencies.

Could that possible preference for a currency that is in line with the idea of a reputation based economy be strong enough for people to reject bitcoin or other currencies? I guess so. Is that likely to become a mainstream attitude? Probably not. Still, the relative currency preferences of people could come with price differences amongst those currencies. Merchants can provide discounts on certain network specific currencies, for example (perhaps in the hope to increase their reputation when they give discounts for a specific reputation currency).

Maybe the strongest arguments in favour of using reputation currencies are that they are futuristic and social and drive the movement towards digital abundance. Those might not be reasons that are based on simple rationality as economic actors, but they are rooted in the real social and psychological nature of human beings. Empirically, humans are not homo oeconomicus, and neither do I think that they should be – at the very least because homo oeconomicus is too much of a simplification. Still, the point about digital abundance can be seen as argument from individual long-term economic rationality, or altruistic economic (super)rationality. In any case, I see sufficient reasons for people to prefer GeoFlux over bitcoin in many circumstances.

The proof is in the future. :smiley:

65

I’ll try to find some time to reply to your latest message later, but for the moment, here’s something I thought you’d find interesting:

1 Like
66

Thanks. I’ve actually started reading Piketty’s book last year, but stopped reading relatively quickly. Not because I found the content disagreeable, or uninteresting, but because there were more urgent, interesting, and important things on my plate. Also I got the impression that you get the gist from having read the 50 pages. Have you been able to read the whole book?

67

Aim high and just call it “Credits” :wink:

1 Like
68

Ah, no, I just found out about it.

69

I’d probably consider basic necessities with the highest weight. Then services and less crucial things. But you got the gist of it.

There are no markets without any volatility. It’s a feature of markets. So it pretty much has to be a relative term rather than an absolute one. Anything that most of the market participants weren’t able to predict sufficiently in advance will cause more volatility. However, the bigger the market, the more of these things will appear all the time and they start to cancel each other out. So, the end result with a big market and most of the volatility canceling itself out is that the price movement is much smaller when measured in percentages.

The value of a currency with a fixed supply, like Bitcoin, tends to grow only with the market (or shrink with it). That in itself should be enough to prevent wealth from accumulating into the hands of the few. I expect there’s some kind of a equilibrium point that the system will tend towards converging on, so the immediate effect would be wealth redistribution.

Demurrage, or a more general wealth tax would speed it up, but seems rather difficult to actually get something like that implemented. I’m not convinced it’s a good long term solution either. A reputation component is likely an improvement for the implementation though. I just hope it doesn’t become similar to how politicians campaign for elections. When a politician is campaigning, it seems they’ll say anything at all they think will get them more votes than it loses them. Loads of empty promises is what happens in politics.

The factor that pretty much negates this issue is that this is not random. It’s entirely dependent on your own carefulness. It’s not difficult to practically eliminate this risk.

You left out the most important one. Transaction costs in exchanging one currency for another. Some people also talk about network effects. That’s basically the same thing because the cost of exchange is what actually separates different currencies into different networks. The cognitive effort in having to consider multiple currencies is also a big factor. Most people just don’t want to think about it. They just want something that works.

Also, I hope you do realize that pretty much all the features you’re planning for GeoFlux are implementable on top of bitcoin as voluntary systems? Granted, that limits them to being strictly voluntary. So, I think the main question is if the systemic enforcement of the parameters you’re designing a necessity for a GeoFlux like system?

If every user of Bitcoin voluntary chooses so, Bitcoins could flow exactly as you’re designing GeoFlux to flow. Even if everyone doesn’t choose to do so, the subgroup that did could function that way among themselves. Why would this be inferior to GeoFlux?

This is definitely a factor. However, the moment there’s some practical use value that’s difficult to get in other ways, this factor goes out the window for most. This is why I believe Bitcoin will continue to become more popular. It’s got the most users out of all cryptocurrencies and supports many new things and is getting new capabilities in practise.

Well, I won’t try to say this is impossible. I’ll just point out that it’s perhaps the most difficult PR campaign in human history :slightly_smiling:

70

I don’t understand your line of reasoning. Could you try being more explicit about the steps involved here?

Demurrage has the advantage of keeping prices stable. Having to deal with increasing prices is not only annoying, it produces extra costs, which could be removed if prices remained relatively stable. Price stability and value stability are the main purposes of demurrage. The redistribution of wealth happens via basic incomes and reputation incomes, and is only indirectly mediated with demurrage. In an inflationary flux currency, it would be mediated via inflationary increases of basic incomes and reputation incomes. In the long term, inflation tends to produce annoyingly high numbers, adding lots of irritating additional 0s. Therefore, I see demurrage, especially conditional demurrage, as solution that is preferable to inflation.

Also, conditional demurrage is not a wealth tax. You can easily maintain your wealth by storing it in commodities that aren’t affected by inflation or demurrage.

In a reputation economy broken promises would cost a lot of reputation. Burnt up trust would weigh more heavily than short term gains from inflated reputation gained though making misleading promises.

Ok, so you are basically saying that GeoFlux would be pretty good as store of value before the saturation stage. With an added GeoFlux burning system the saturation stage would be replaced with an equilibrium stage, at which currency generation and demurrage plus burning cancel each other out. The question is at what level that equilibrium will lie. I think this really requires real world testing to find out, since it depends on the real-world attractiveness of the (potential) burn rewards.

That’s a good point. In theory, transaction costs could be vanishingly low, which would remove this as a factor.

Right. People want “credits”, and not having to deal with hundreds of different currencies. This means that the most popular legally accepted currency (if there are more than one) will probably win big time, at least everything else being basically the same.

It’s not clear how you imagine that to work. There are different possibilities. Please state your preferred scenario in sufficient detail.

Or it might be the easiest PR campaign in human history: You get free money. And you even get extra money, if you do stuff that people like. The only problem is that this will probably sound too good to be true. I just need to convince people that the system is legitimate and works in reality.

71

It’s the main point in the book, Capital in the Twenty-First Century. The increase in the value of Bitcoin will tend to follow the real economic growth over the long term. In other words, investing into Bitcoin will never get you more profit than the actual growth of the underlying Bitcoin economy. I believe inflationary currencies are the main reason you can earn more than the economic growth with capital. So, if the world moves to using Bitcoin as the main currency, it’ll remove the advantage.

Of course, I haven’t read the book, so I’m not entirely sure if this is a valid application of the main point, but for the moment, it seems solid enough for me.

Yes, that’d definitely fix some problems.

I was talking of wealth tax in a more broader sense than just GeoFlux here. Not really demurrage related anymore.

I don’t know, politicians seem to game reputation just fine to me. Their broken promises don’t seem to make much of a difference in them getting re-elected. Of course, this could just be an artifact of no permanent record of their lies, but well, I’ll believe it when I see it :slightly_smiling:

Try not to forget that it’s pretty inflationary before that.

Assuming it can be automated with low enough risk, then yes. The transactions costs mostly come from the exchange rate risk.

I don’t have anything that concrete thought up. I just wanted to point out that competing with Bitcoin is not unavoidable. Cooperation could work too.

That’s the challenge. People are very well conditioned to think that “there’s no such thing as a free lunch”. It’s not enough to promise free money. You’d also have to convince them it can work, which can be difficult when most people don’t even get how the current system works.

1 Like
72

Oh, great. Now I feel compelled to read that long book entirely. Well, there are worse ways of spending my time. :smiley:

This point may be a bit off-topic, but I think the best solution to the inequality problem would be schemes that require payments for use or exclusive usage rights of common resources like land, water, clean air (who pollutes it, must pay), in the spirit of a

Either it matter what poiiticians say and promise or it doest. In the first case, having a permanent record of their lies and public reputation scores will be useful. In the latter case, worrying about the reputation of politicians doesn’t matter anyway.

Bitcoin was also pretty inflationary in the beginning. It would still have been a good idea to buy Bitcoins at the earliest stages!

Yes, I’ve thought about that route at first, until I got the idea to make an even fancier currency. Starting a new currency seems to be easier than getting a significant fraction of Bitcoin users to adopt a new paradigm. At our current stage, the cryptocurrencies people put out there seem to behave similar to shares of certain ideas. People using cryptocurrencies are shareowners of the idea of cryptocurrencies in general. By selecting appropriate cryptocurrencies, humans can vote for ideas with their money.

Some people claim that the current system works, because most people don’t understand how our current system works. So, any strategy that relies on people understanding our current system is probably doomed to fail. A new system may only succeed, if its basic principles are easier to grasp than those of our current system. I am hopeful that people find it easy to understand basic incomes and reputation incomes. Those seem to be simpler concepts than for example fractional reserve banking.

73

The complexity doesn’t really arise from the fractional reserve thing itself. It’s the layers of interdependent contracts piled on top of all that. That’s also what makes it brittle. The too big to fail crap. Those layers are, unfortunately, perfectly replicable on top of any currency. The only way to get rid of them is to make them obsolete. Education is another option, but I’m not really hopeful about that currently.

74

I think it’s important to understand why those layers of complexity above the layer or basic economic services has developed. At which point does additional complexity become a systemic threat, instead of providing more stability? Are certain financial products or contracts inherently economically destabilizing? Should those be banned (if possible at all)?

How?

Strategies that rely on people being well-educated usually don’t work, unless you somehow make absolutely sure that people are well-educated.

75

Unfortunately, I lack in depth understanding of what these are. I only know that I don’t understand much about them. But mostly, they appear in the form of debts between companies.

76

I’m just inserting a “more research needed” note here. :smile: What financial instruments and products are problematic and why?

Does anyone else have more knowledge about this topic? @MvB, @Mark_Larkento, @ZeUs, @acta_non_verba, @Eric_Hunting, @isenhand, @technologiclee, anyone?

77

Yes. My career includes extensive consulting, systems, and management experience in finance.

I’ll need to find the time to read through this discussion in order to craft a useful response.

I’ll add this to my ToDo list, @Radivis .

1 Like
78

Coming very late to the discussion, and at the risk of derailing a very well-developed thread, I wrote a paper recently for a Tallinn U project (that, unfortunately, was rejected) that might be of some interest here;

The Digital Tao

In the early P2P forum discussions on digital currency that eventually led to the creation of Bitcoin, I argued that a cryptocurrency would be transitional technology because the concept of currency itself was now redundant as an abstract metric of demand, credit measured in currency unrealistic as a metric of merit, and that, more generally, computers aren’t limited to dealing in numbers anymore, so why should economics?

In a digital economic system money is redundant because it only functions as an abstract metric of demand which can much more effectively be measured directly by tracking and performing predictive quantitative analysis on supply and consumption. If this analysis is sufficiently effective, you can then model an ‘integral’ basic income built on a baseline model of standard of living and forget about the ‘point of sale’, just stocking the shelves and letting people take what they want free-within-reason. This is what is often called a ‘resource based economy’ where, with human labor factored-out, one need only track demand relative to the network flow of resources.

It’s the stuff above the baseline where things get interesting and the concepts of digitally-mediated capital and merit become important. I think that the central question of economics today is, what is merit, how is it awarded, and by whom? This is the question at the heart of all strife today.

Industrial Age Capitalism is premised on the notion that centralized industrial mass production needs big capital to create. And so we’ve created a system which, through the monetary system, extracts and collectivizes a portion of the future productivity of society and gifts it as capital to supposedly special people of high merit so they can create these big production systems for the benefit of society through the improved access to goods. And we incentivize those people to use this capital for this purpose by awarding them a margin of profit and ownership. But on what authority is this future productivity being extracted? How is this merit defined and who is defining it? It’s not even a remotely democratic process anywhere. In practice, the people making up the rules are the same people being judged as having the most merit and thus reaping the benefits of the capital awarded them. Bankers and investors make a pretext of scientifically analyzing risk, but at the end of the day a poor black person with the most finely crafted business model for the most profitable business venture in history is not getting a dime. Our culture has no definitive, rational, model for societal merit. In general, it is still based on race, class, nobility, and/or wealth.

So the central issue of a prospective Social Capital economics is defining merit and I have long been interested in how trends in computing might facilitate that. As I suggested, computers aren’t limited to working with numbers. Today, they are increasingly capable of a more associative, organic, analysis of information. And we will soon see the impact of this with the realization of a new Semantic Web where diverse information auto-associates through the comparison of meta-data automatically created as information is uploaded or created online. One of the most important potential applications of the Semantic Web is something called Social-Semantic Networking–the future of online social networks.

A Social-Semantic Network is a semantic web built on personal information for the purpose of automating communication and exchange across a community and the smart systems in the built habitat. It is currently in development with projects like Netention; a Semantic Desktop environment for hosting Social-Semantic Networks. The interesting thing about these networks is that they have the ability to ‘understand’ the goals and intention of individuals, communities, and societies through associative analysis. Hence the portmanteau; networked intention. It’s sort of like having a system that continuously and anonymously polls everybody about everything all the time. An automated form of direct democracy. And it seeks mutually beneficial associations between individuals and the community and then automate connections and exchanges. It’s like having an Internet that knows you as a person and has a pronoia imperative–a digital conspiracy to help you and everyone else. And so I considered the possibility of the integration of Social-Semantic Networking with an automated resource management and production infrastructure to create the basis of a digitally mediated social economics. If we understand the intentions of society and the individual and can quantify their congruence we then have a basis of merit. Societal merit is the degree of congruence between individual and societal interests relative to intent as indicated by past performance, current activity, and projected performance. The more your interests align with those of society, the more merit. Link that associative character and intent analysis to a production network and we have a basis of Social Capital ‘weighting’ of network resource demand relative to the activities and locations of individuals. Thus I arrived at a concept called the Digital Tao, which I detailed in the paper noted above.

3 Likes
79

I came across some writings that I think are quite on topic for this thread.

I also found this video quite interesting. TED Talks - Nick Hanauer: Beware Fellow Plutocrats, The Pitchforks are coming. - YouTube
Although, on it’s own, it’s not able to explain how come we have such high unemployment in Finland despite pretty high minimum wage… Although, the minimum wage stops feeling so high when I remember that the government takes 24% of most things we buy through the VAT tax. When combined with other taxes, the total might come up to 50% or even higher.

Well, at the very least that’s very suggestive that the government isn’t spending that money correctly to keep the economy rolling properly.

Anyway, I haven’t read the continuation yet, but I’ll link it here anyway. It’s highly likely to be interesting too:

https://steemit.com/liberty/@falkvinge/a-simplified-taxless-state-a-proposal-part-three-of-three

1 Like
80

I find it annoying how people who point out that the economy is not a zero-sum-game insist that government activities, especially redistribution are a zero-sum-game. Government activities are not a zero-sum-game, and how positive they are depends on how smart they are designed and implemented. Finding out what smart government activities are should be the task of (economically informed) politics.

The argument about free exchanges being mutually beneficial and wealth-creating depends on the degree that those exchanges are actually free. The more coercion is involved in an exchange, the more value is destroyed prior to the exchange in the first place. Even the fact that the subsequent exchange increases value for all involved parties doesn’t necessarily compensate both parties for the loss of value caused by the initial coercion. A few examples to demonstrate this point:

  • A situation that could happen in a stateless system, or in a sufficiently corrupt state: A thief steals your stuff and is daring enough to sell it to you again, because you happen to be in a position that doesn’t allow you to obtain your previous property in any other way, other by paying the thief. This is obviously a loss for you and a win for the thief, even though you could interpret the voluntary re-purchasing of your prior property as free exchange (after all you could forgo your claim to your prior property).
  • Usury enabled by monopolies (usually enabled by government protection). Monopolies can charge exorbitant prices for rather essential goods and services. You are usually still better of paying those prices than not, but compared to the more “natural” solution that there is no monopoly, it’s an effective loss for you, even if you pay the price “voluntarily”.

My conclusion is that governments have the important task of minimizing all kinds of coercion that destroy value for market participants. Governments need to create freer markets before one can say that markets always create value for all involved participants.

I think the most reasonable explanation to that is that unemployment is a U-shaped curve in dependence on the height of the minimum wage: There is an optimum minimum wage that minimizes unemployment, whereas lower or higher minimum wages would cause higher rates of unemployment. Nevertheless, I think that minimum wages are a rather awkward way of increasing overall demand. Those who manage to get a job profit, while those who can’t get a job, no matter for what reason, are out of the loop. Getting a job is also harder when there’s a minimum wage in place. If payments for work could be arbitrarily small, then it would be much easier to sell your work to others, especially in areas in which you don’t have much qualification.

Having a universal basic income would make a minimum wage redundant. The UBI would both increase public demand, and improve the bargaining position of workers (because they wouldn’t actually require work for sustaining themselves).

Ok, I’ve read those posts. It’s interesting that Falkvinge comes to similar conclusions than those I harboured for quite a while: Introduce a universal basic income, pay for it via something like a land value tax (or land usage fees, whatever you want to call it). Use auctions for determining the height of the tax / fees. From an economic point of view that would be pretty close to an optimal solution.

Anyway, there is a lot of evidence that high inequality does have a lot of bad consequences, even in wealthy countries. At least for stability’s sake there should be sufficient mechanisms that prevent a arbitrarily high concentrations of wealth. I am not convinced that a land value tax / land usage fees would suffice for that purpose. How would you deal with organisations (corporations, DAOs) that require little to no land to do business, because they provide online services for example? What would stop such entities from accumulating so much wealth that the population at large becomes impoverished in comparison? I’m not sure how to fix that issue in the best way. Progressive taxation of profits, or taxation of large collections of capital would probably be sufficient solutions, but they come with their own costs and problems. My intuition tells me that there should be a more elegant solution. Perhaps those issues would resolve themselves naturally in a reputation economy, or maybe they wouldn’t.

A different perspective may point to an interesting approach however: It’s reasonable to demand from the government to address the issue of externalities. People should pay for the negative externalities they cause. And people should get rewarded for the positive externalities they create. With a sufficiently smart populace a reputation economy might be able to deal with the issue of externalities via self-regulation. Our current problem is that humans usually aren’t smart enough in many cases, so some form of government intervention is necessary to fix the biggest problems caused by stupidity, or self-regulation failure if you want to use a fancier term. Government intervention is a very error prone approach nevertheless, since governments consist of stupid humans, too.

Now, excessive inequality caused by overwhelming accumulation of capital by certain entities could be seen as negative externality, too. So, the government would be justified to charge those entities for causing that kind of excessive inequality. Of course, this would require sufficiently stringent definitions of “excessive inequality”. Excessive inequality could also be seen as another form a a priori value destruction, by the way (new market actors without pre-existing capital have a significant a priori disadvantage when they enter the market).

Perhaps the solution could be analogous to the land usage fees. As ownership of land is something that is managed and protected by the state, ownership of capital is something that’s effectively protected by the state, too. For having your capital ownership title protected from third parties, you would have to pay fees to the state (because only the state can effectively protect capital from appropriation by hostile third parties). How would the height of these fees be determined? The state could implement periodic (or on demand) auctions for ownership fees for certain collections of capital. If a bidder places a higher final bid than the current owner, ownership of that collection of capital would change. Such a system would end capitalism as we know it, since capital isn’t owned privately any longer, but merely “rented” for certain amounts of time. One could suspect that such a system might actually be superior to capitalism, since capital would be generally owned/rented by those who think they are able to make best use of it, rather than being stuck with people who aren’t necessarily qualified for using capital optimally. Let’s call this new system “auctionism”, until someone comes up with a better term for it. It’s certainly sufficiently different from capitalism and socialism to deserve its own name.

An obvious problem of auctionism would be hostile capital takeovers. However, such takeovers would always coincide with an increase in capital ownership fees, which would benefit the populace at large, all other things being equal. Such hostile takeovers could be used to eliminate competition, on the other hand, which would impact markets negatively. Probably the state would have to set up rules for such takeovers, so that they will be rather unlikely to cause massive harm. In particular, capital used for predominantly and essentially private purposes like real estate used for primary personal housing would need to be protected with especially stringent rules. Or maybe immobile capital, except for land itself, would be exempt from auctioning. It might also be a good idea to exclude non-profits and benefit corporations from auctions. Also, insignificant collections of capital should be excluded, too, but then that would require keeping track of what collections are significant.

Finding a universally satisfying system is really hard. Until humans become really smart, we will probably always have to deal with kinda awkward solutions and compromises.

1 Like
81

I think there probably is a way to represent everything, including laws, through contracts. We have the system of laws because the logistics of making contracts with potentially hundreds of millions of participants has been … well, impossible. However, that might not be the case anymore.

Every law has a cost for some parts of society and a benefit for other parts of society. If both of these could be calculated and the ones on the losing end compensated by the ones on the winning end, I think that’d result in a rather fair system where we only get laws that are ultimately beneficial for the society as a whole. The problem is the logistics of determining who loses and who wins and by how much. I suspect some kind of a system where people bid for or against specific laws along with simulators publicly available for simulating the effects of those laws on society might be a starting point to consider.

Of course, the costs of enforcing the law also need to be taken into consideration. Our current system seems to pretty much just ignore the costs of enforcement and other costs and just keeps on making new laws adding to the burden.

The current track record governments have at this indicates that the current structures of governments will only be successful at this for a limited time. Eventually the government itself becomes the party that creates the most coercion on the market. I don’t disagree that this would be the ideal, but at least our current forms of government seem to be unable to provide it. They have too severe lack of garbage collection mechanisms (as in programming lingo) to be able to achieve this ideal.

Yes, the U-shaped curve sounds realistic and yes, it’s awkward. It’s just an easier sell to most people than an UBI. Too many are somehow convinced that we’d be left with a country of lazies who won’t work because they don’t have to if we did that.

While reading this, I might have gotten an idea of how to mix the sosialist idea of everyone owning equally much of everything with the capitalistic profit motive. Basically, first encode it into consitution that everyone owns a share of the whole that is expressed as 1/population. Each person can theoretically claim complete personal control of that portion of collective resources if they want to. Alternatively (and this the key here), they can rent a portion of the share to someone else to control in their stead.

So basically, if you want to control more of the society’s resources than your fair share, you’ll have to convince someone to authorize you to use their share by proxy and presumably, that’d require paying them rent for it. I think this would beautifully make the negative externality aspect unnecessary because it’d be quite difficult for wealth inequality to form under this system.

I think this system would require two sorts of assets. One for most important resources that produce things of value and another for consumables plus money. Only the first sort should be included in the legislated fair share. consumables and money, on the other hand, would work like today. They’re traded on the free market. Who knows, perhaps money would end up being unnecessary and you could do everything through barter, given advanced enough trading framework.

I think this system would give each person a natural UBI while keeping the economy very close to as it is today. It’d just distribute the economic power much more fairly than it’s distributed today and hopefully be able to keep it that way. The main difference to what you were describing is that I threw out the centralized component of the system you were describing and decentralized it.

2 Likes
82

Ok, that’s pretty insightful and radical. Estimating the costs of laws for certain parts of the populace would be tremendously complex, even for a single law. And you probably can’t simply consider laws in isolation, but have to consider the system of all relevant laws. In all simulations you will have to consider that people adapt to the law that currently exists, in more or less desired ways. Many people don’t even bother with knowing the legal situation, and rather act on social norms. How do you get their behaviour into the simulations? The whole effort sounds so complex that it almost sounds easier to get a society to run on no laws at all, than to get that “law cost compensation mechanism” even approximately right. :sweat_smile:

I’m not sure about that. Some governments seem to do rather good jobs, for example those of Iceland, Denmark, Switzerland, Canada, or Norway, while many others fail miserably. In a globalised world it becomes increasingly difficult however to create optimal market conditions within a single nation. We’d need a global economic governance (that’s not affected very much by particular lobby interests) for optimising conditions for enabling markets to flourish. Of course, you’d need a governance with high intelligence and integrity for that purpose. AI to the rescue?

That’s a really intriguing idea. The practicalities of this system might make it too unwieldy, though. How do you rearrange shares, if population grows or shrinks? What does it really mean to own a billionth of a piece of land, or a share of a company? It’s like you own a bit of everything, but nothing in particular. I mean, it wouldn’t even make sense to allocate ownership of a brick of a factory building to anyone. Capital only makes sense, if it comes in large chunks that can be used effectively. A more reasonable interpretation would be to declare everyone to be shareholder of every company.

Yes, it probably needs to work that way. I’ve come to the same conclusion when thinking about my idea of “auctionism”. Only means of production are auctioned off, while consumables effectively are traded as usual.

83

3 posts were split to a new topic: Introducing laws via public bids