RE: Does the United States Have Enough Space Bucks to Pay for Universal Basic Income?

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RE: Does the United States Have Enough Space Bucks to Pay for Universal Basic Income?

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revo (60)in #basicincome • 7 years ago (edited)

I just wrote an article on similar themes here - https://steemit.com/cryptocurrency/@revo/what-can-iceland-and-cryptocurrencies-tell-us-about-a-new-monetary-system-and-a-universal-basic-income

Keep in mind that while money is a measuring device, more importantly it's a placeholder for value (and value is what is traded in capitalism). So it holds value itself. Remove money somehow, and you remove value. And this relationship was even more direct back in the great depression as money was backed by a physical valuable commodity (gold). Interestingly what you find in times of economic calamity like that (and the GFC) is that alternative currency (i.e. space bucks) proliferate and step in to the role of some of the AWOL state money.

The good point you make in your article (and I make in mine) is that money isn't some mystical thing that we have no control over and have to be subservient to its random whims. The means of exchanging value is something that we are fully in control of and something we can manipulate as necessary to keep economic activity happening.

7 years ago in #basicincome by revo (60)

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revo (60) 7 years ago

Just to clarify a bit... Unlike inches, value doesn't exist independent of the thing that measures it. Distance exists regardless of whether there are rulers around to measure it. Value, on the other hand, doesn't exist until it is measured. So you need money (or some analogue) for value to manifest.

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scottsantens (62) 7 years ago

Nice blog post! Upvoted, resteemed, and shared on Reddit.

I'd go a bit further as to what money is attempting to measure (I say attempting because it definitely does not measure a great deal of value) and suggest that money is measuring trust. I think the fact "In God We Trust" is on US currency is more fitting than people think. The only reason any currency holds value is a collective belief that it does. We trust that it has value, and we trust that by giving it to someone, we can get what we want in return, and the person accepting it trusts that they can in turn use it to get what they want.

I linked to it in my post, but Alan Watts had a wonderful example that he used to help explain money.

I must introduce this with a story which is entirely legendary, indeed quite apocryphal. The great banks of the world at one time got absolutely sick of the expense and security measures involved in shipping consignments of gold from one bank to another and so they decided that all the chief banks of the world would open offices on a certain island in the South Pacific which was balmy and comfortable and there they would store all the gold in the world. And they put it in great subterranean vaults reached by deep elevator shafts and then all they had to do when one bank, one country owed gold to another was to trundle it across the street. And this was very efficient. It went on beautifully for five or six years. And then the presidents of the world banks got together and said, "Let's have a convention out on this island and take our wives and families.”

So about seven years from the date of opening, all those presidents and their wives and families went out to this Pacific island and they inspected the books. And everything was beautifully in order. Then the children said, "Oh Daddy can't we see the gold?" They said, "Of course you may see the gold." And they said to the managers, "Let's take our children down to the vaults and show them the gold."And the manager said, "Well it's a... it's a little bit inconvenient at this time and perhaps the children would not really be very interested, after all it's just only old plain gold." And the president said, "Oh no, no, come now, they'd be thrilled. Let's go down and see."And there was further humming and hawing and delays and finally it came out that a few years before there had been a catastrophic subterranean earthquake and all the vaults had been swallowed up and all the gold had disappeared. But so far as the bookkeeping was concerned everything was in perfect order.

What this means then is that money is nothing but bookkeeping. It is figures. It is a way of measuring what you owe the community and what the community owes you. It is of course as you all know a substitute for barter. If you worked on a farm and the farmer paid you in terms of ears of corn, onions, cabbages, and other vegetables, and yet you wanted a pot and pan of some kind, then you took a few vegetables over to the man who so made pots and pans and you swapped. Some people used cowry shells to stand for money so that you wouldn't have to barter and carry around all these inconvenient loads of goods and then of course gold was used because gold was rare and because gold was supposed to have a constant value. You might ponder the question when a banker buys gold with what does he pay for it? The answer is a mystery called credit.

Credit is bookkeeping and as the economy of the Western world developed it was found that there was not enough gold around, if it were to remain constant in value, to exchange goods and services. You could of course have changed the picture by putting down the price of goods and services to keep pace with the amount of gold in circulation, but nobody will ever put down the price. There's something in our psychology whereby prices always tend to go up. But at the same time therefore because the amount of gold in the world did not provide an adequate channel for the circulation of goods and services, all great industrial nations went heavily into debt. They created a thing called the national debt which year by year gets bigger and bigger and bigger to the horror and consternation of old-fashioned Republicans who pay their bills. But the reason for the increase of the national debt is extremely obvious. It is that with an expanding gross national product there needs to be more and more money, that is to say tokens of exchange, in order to circulate the amount of goods produced, which is ever increasing.

I like how this thought experiment disappears the gold without anything changing, because its physical presence doesn't matter. It's our collective belief that gold has value, and that money can be exchanged for gold, that gives gold-backed currency value. But fiat money also has value, as does cryptocurrency, if we believe it does, and trust it will continue.

Personally, I love the idea of creating money equally in the hands of citizens instead of letting banks do it, or letting government do it in a way that they get to decide what to do with it. Citizen seigniorage is a full decentralization of currency creation, and I think because money is a public good, it only makes sense.

If you're interested, I highly recommend this paper along these lines and those you wrote about Iceland. Cheers!

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revo (60) 7 years ago

Cheers for that Scott. I'll take a look at those.

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RE: Does the United States Have Enough Space Bucks to Pay for Universal Basic Income?

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