[ExI] Monetary Evolution Now! was REVOLUTION NOW!

[The Avantguardian]

>________________________________
>From: spike <spike66 at att.net>
>To: 'ExI chat list' <extropy-chat at lists.extropy.org>
>Sent: Wednesday, November 9, 2011 5:05 PM
>Subject: Re: [ExI] REVOLUTION NOW! all-thing.org

>I have a suggestion for a system to replace capitalism.  Unfettered capitalism.

Interestingly, this has been the topic of debate between myself and an economics student at the University of Nevada for some time now. I can pretty much some up where we, myself a left-leaning libertarian biologist and him a right-leaning libertarian economist, have found common ground as follows:
 
Spike's suggestion is rendered politically impossible by our ape heritage. What the average economist or indeed conservative is either ignorant of or refuses to believe is that every child is born into the world with a significant proportion of the population, a ravenous crowd thousands if not millions strong, fully intent on exploiting, oppressing, cheating, and manipulating him in every possible way without ever having to meet him or learn his name.
 
There be energy-parasites and in the case of criminals, energy-predators that are looking for *you* and anybody else they can prey on.
 
Economists refuse to see the alpha-males and banana thieves in the likes of Carlos Slim, Bernie Madoff, and Mayer Amschel Bauer Rothschild that, in the case of Rothchild moved him to say, "Give me control of a nation's money and I care not who makes it's laws". Such individuals skew economists equations away from rationality and into the realm of politics.
 
To put it succinctly, the current Federal Reserve and debt-back Fractional Reserve Banking model as well as the numerous other chest pounding alpha-male threats we call legislation make unfettered capitalism impossible and speculatory bubbles and national deficits inevitable. If you have a system where the only way some people, such as a proportion of the elderly can eat is if they borrow money from others to buy food, or be enrolled in some government-sponsored entitlement program, then it is practically ineveitable that one has a national debt. Add to that the costs of government-subsidized housing and health-care and well you get a national debt and cost of living that continue to escalate even as economists cheerily blather about boundless growth in better economic times. 
 
The only way to make unfettered capitalism possible is to take control of the money-supply away from the few and put it into the hands of all or none.
 
Notice, I said the *money supply* not the money itself. The market ought to control the money and its flow to and between individuals but should do so unfettered by politics. Also note that I did not suggest that gold or any other material substance back the currency as that is not progress but a return to an even worsely flawed system since gold and practically any other substance is currently monopolized to a greater extent than cash is.
 
Instead my economist friend and I agree on some reforms that should make the market free once and for all and unfetter capitalism:
 
1. Labor-backed currency. For an economy of scale, there are only *two* effectively unlimited resources in the entire universe: labor and time. If you base your economy on a naturally-limited commodity like gold, oil, or some such, then ineveitably a significant portion of the population will *not* be able meet their Lazlo's hierarchy of needs without going further and further into debt to those who own large amounts of that commodity. Similarly, a debt-based economy like we currently have allows government to print money at a whim, give it to a handfull of privileged bankers, and allows them to further leverage that vaporous money twenty-fold turning your debt to their profit and acting as the gatekeepers to your ability to produce wealth. This is expressly *not* what Adam Smith and founding fathers had in mind.
 
One thing that could be done is base your currency on the two things that there is guaranteed to be an unlimited supply for as long as any government lasts:
 
Labor and time. Populations will continue to grow so long as an economy can evolve the means to sustain them. Furthermore a population-based money supply is self-limiting as you will not have many times more currency in circulation at one time than what is required to sustain the overall standard of living of said population. Time must be brought into the equation because it reflects productivity. The entropy of the universe always increases and as such entropy and time point in the same direction. Time is essential to measuring the physical quantity that is literal work and therefore must itself contribute to the money supply.
 
Based upon this two fold argument the ideal basis for a currency is literal man-hours. Every fiscal quarter, the Federal Reserve or Central Bank should total up the number of man-hours worked by the country's labor-force the previous quarter, multiply that by a statitistic called the National Standard Wage (This is *not* a minimum wage!), and the product should be the amount of money the government prints and loans to the banks at prime interest rates that fiscal quarter.
 
Note that this will couple the money supply directly to the economic growth of the country. Never again will more and more dollars chase fewer and fewer goods. Instead the number of all goods would determine the number of dollars in circulation. Furthermore note that this only determines the total money supply and not how much of that money supply that any individual earns. That should simply be allowed to float on the market based on the demand for ones skill-set.
 
2. Completely privatize the Fed or Central Bank. This is simple. Replace *all* entitlement programs with the ability for every working citizen to purchase stock in the central bank of their economy at market rates that are based on the international currency markets. Then allow those citizens to sell those shares back to either the central bank or to another working citizen during medical emergencies, to settle debts, to fund their retirement, pay their taxes, etc.
 
It is not rocket science but I think this is good medicine that would do wonders for *any* economy. My friend, his name is Patrick, said that if Adam Smith and Karl Marx sat down in a room, they would agree this is a good reform. 
 
What are your thoughts? I especially would like suggestions on what to call this model of central banking? The Transparent Reserve model?
 
 
Stuart LaForge


“Institutions will try to preserve the problem to which they are the solution." -Clay Shirky