How can productive individuals find relief from inflation, unemployment, over-taxation, and violence? They must choose some product to be a currency. Before choosing any product, an understanding of currency is necessary. This chapter provides a short description of currency and the author's candidate for a new, producers' currency, namely, the human lifehour.
A currency can be defined as
the common intermediate product
A currency is not usually thought of as a product, and yet, have not all currencies required some production time on the part of human beings?
The definition above points out two easily understood properties of currency. All currencies are products of human effort, and a currency should function as a convenient, intermediate product for the exchange of goods and services. Why do currencies lose their convenience as common intermediate products? The key to the answer has to do with time.
When one produces a good or service, one accepts some product in exchange. This may be an intermediate product which one intends to exchange for other products at a later time.
How well the intermediate product holds its production time content (worth) can be quantified each day, week, month or year. When it comes to holding currency for a pension or for savings, the loss of production worth over the passage of time is the determining factor. If a product does not hold its production worth over time (that is, if it is not constant and current in time), it will not serve as an intermediary between product transactions far apart in time. The faster a product loses its worth in production time, the faster people want to get rid of it.
When one receives a paycheck, one receives what one's production time is currently worth. Thus, the currency product that one accepts is quantitatively synonymous with the amount of time one spent at producing some good or service. Inflation is the cheapening of the production time content of one's currency. The currency will not buy as many goods or services. It will buy fewer minutes of someone else's production time. Inflation is the retroactive cheapening of what one was worth in the past, if one holds onto the intermediate products originally received.
Lasting currencies keep their production time content: their temporal value is always current. While the best currencies can be kept constant and current, the worst currencies rapidly lose their production time content. This loss can result from excessive printing of the currency. Or, the current production time content of a currency can decrease because actual production time is decreasing.
Our own official currency is suffering an accelerating loss of its production time content. Why? Because the productive individuals have not organized together to maintain one common, intermediate product kept constant in its production time content.
A Proposed Currency: the Lifehour
Today, as was true before any of us were born, each human being has 24 hours in each day of his life. Each one of these hours is a lifehour. One's wealth at the end of a workday depends on two time variables. The first factor is a simple quantitative measurement of how many lifehours one spent working that day. The second factor is how productive one actually was during each lifehour of busytime.
An hour today is the same as it was a century or millennium ago. Likewise, the lifehour as a currency would be current year after year. Its production time content would always remain the same. By keeping the lifehour constant and current in its production time content, producers who are minutes, hours, days, years or decades apart could exchange their time. Their common intermediate product would not have suffered inflation.
As the name of a form of currency, "lifehour" reduces the distance between the symbols of production and production itself. If the symbol of production measures actual lifehours, it will be easier to maintain it constant and current through time.
In a well managed system of production, the cost of all goods and services decreases constantly. This reduced cost represents a reduction in the basic cost underlying all currencies: human time, human lifehours. Policy makers should maintain or improve production of existing goods and services. To avoid undercapitalizing essential production, they should prevent dislocation of human resources which imbalances production. Our habitual politicians and their necronomic sidekicks are constantly promoting productivity gains in nonproductive busytime activities. In a well-managed system of production, incentives are finessed to allow a gradual but continual drop in the human cost of producing existing goods and services. This gradual cost reduction is the basis of productive deflation.
Most people do not realize that inflation is due to shortages of production more so than a massive printing of money. More tragically, most people do not realize that production shortages result when our traditional financial centers and capital markets direct the nation's wealth away from the production of essential goods and services, causing sinflation.
This misdirected wealth ends up in less essential production or, worse, in acquiring, streamlining, and reducing production. That latter misdirection of capital into counterproductive acquisitions is a form of decapitalism, the antithesis of capitalism. Decapitalism decapitates production.
When the cost of goods and services are measured in human lifehours, it will be very clear when and where the costs are going up and down. People will readily see that the price of food is rising while televisions are decreasing in cost.
As an Eliminator of Subtle Theft
In a system of production free of thievery, one's wealth is a direct result of the quantity and quality of one's busy lifehours. For a given level productivity, the doubling of workhours will double the amount of products that one owns. Simple mathematics dictates this relationship between production and wealth possession. Similarly, for a given quantity of busy lifehours, doubling the productive quality or worth of each lifehour will double one's wealth.
Logically, a simple mathematical relationships exists between the quantity and quality of one's busy lifehours and the quantity and quality of one's wealth. They are the same. Legally, this relationship does not exist in a system of production plagued with overt or covert theft.
When theft occurs within an economy, some people end up with more wealth than is justified by the lifehours they have worked. Simultaneously with the gains from theft, there are the victims of the theft. Their ownership and consumption of wealth falls below the quantity and quality of their production.
Theft can take many forms within a system of production. The most obvious, recognized forms of theft are burglary, robbery, and embezzlement. Less obvious is price-gouging for a good or service when supplies are low due to hoarding or restricted production. Theft also exists because of the incompetence and corruption of legisflation: legalized inflation. Legisflation is the mistranslation of the logical and simple mathematical laws of production into legal laws that are counterproductive.
Even less obvious is how theft can occur through incompetence in the management of production, eventually imbalancing and collapsing the system of production itself. Invariably, the imbalancing of production involves the misdirection of human resources (lifehours) from essential production into nonessential production. As a result, the production of essential goods and services decreases per capita. This production recession generates shortage inflation within the essential products (sinflation), and cheapens the production time content of currency.
What happens if production time is not devoted to essential goods and services? The essential production time content of the common, intermediate product decreases. It is not constant or current. Incompetent management of production robs a person of the worth of one's currency.
International trade should occur as an exchange of national lifehours with no deficits or surpluses beyond a few percentage points. A nation's lifehour is basically the gross national product divided by the number of hours of people alive. Imports and exports should be paid for with a nation's lifehours.
With the present currencies, divorced from the actual substance of wealth creation, some nations have an advantage over others. In particular, the United States has benefitted from de facto monetary colonialism since World War II. The world conducts trade in dollars. The U.S. has exported dollars (symbols of human time) in exchange for real wealth, goods and services. In the short term, the U.S. citizen and foreign manufacturers benefit. However, this one-sided relation has imbalanced both the importing and exporting economies.
The U.S. economy has had key segments collapse because it has been cheaper to print or borrow dollars to buy these products from abroad. Many foreign economies do not meet domestic needs because of export to the U.S. When the U.S. economy collapses, so will the foreign economies.
With its currency reflecting the creation of wealth, namely, the lifehour, a country cannot import more than it exports. In essence, countries directly barter the value of their time. "We'll give you 100,000 hours of our labor for 100,000 hours of your labor." If a country does not organize its people to work then they will be unable to import. Imbalanced trade requirements produce economic "hot flashes" during unstable periods. Currency fleeing a troubled country exacerbates such conditions. A country's domestic wealth should stay at home, especially during instability. The brains behind the wealth will stay, providing the intelligence needed to address the crisis.
The disappearance of hard currency destabilizes both the exporting and importing country. During dangerous times, international tension increases when money bleeds from the body of origin rather than circulating therein. Currencies used in international trade are too liquid. A less volatile currency would prevent the simultaneous anemic decline of one country and inflationary pressure in other economies.
As an international currency, the lifehour would balance economies. Both importing and exporting countries could balance their production of goods and services to meet domestic needs rather than foreign desires.
Summary: Producers' Choice
Ultimately, productive individuals have the power to keep a common intermediate product constant and current in its
A currency's inflation or cheapening is ultimately the producers' choice. Insufficiently organized or educated, they will pay higher prices by not exercising their right to determine a real currency. If those who are productive do not chose a stable product for a currency then they will suffer the theft of their time. The less productive people will benefit from the currency instability to gain income without producing a single good or service.
Foremost among our unstable products, which unproductive citizens can manipulate, are the habitual politicians. Politicians are unstable products of their environment. They flip-flop and muddle through at the call of the loudest voice of the well-fared or on the fattest billfold of the well-fixed. Politicians have legalized many inflationary returns. Inflationary returns are just examples of getting something for nothing. Who gets the most inflationary returns? The people who suffer from inflation? The productive backbone of an economy?
Inflation can stop. It can stop so quickly that people will wonder why it took so long. The reason is that people did not have the means to organize democratically, nor the capitalistic insight to choose a product that could be kept constant or current. The means are democracy and capitalism. The product is the lifehour. It's your choice.
Warning: Anyone found stealing lifehours will be forever banned from participation in and rewards of Better Democracy and Capitalism.
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