GOLD OR ANOTHER 4-LETTER WORD
Something's wrong with the world's currencies. The basic problem is the wrong foundation on which politicians and economists have conceptualized and implemented currencies. The following show the absurdities, costs, reasons and flaws of separating the currency symbols from the substance of our problem-solving, work time.
"Will size of Japanese economy surpass that of United States? .... Absurd maybe, but true. In the view of many economists, that mathematical curiosity shows how poorly exchange rates reflect reality."
What problem-solving production did speculators create and manage to earn more money in a few days than the gross national product of many countries? They produced less than nothing. Talking about self-defeating actions: banks provided credit lines for the speculators' hedgefunds to orchestrate derivative speculation! One can only guess that bank executives personally make money from this bank-destructive practice, e.g., Barrings Bank. Who pays? You do.
Where does the money come from? The speculators steal money from the little guys. How? Through financial instruments created by the speculators: derivatives. Who, knowingly or unknowingly, have exposure to derivatives? Banks, mutual funds, companies, schools, cities and organizations. Victims of speculators are:
Maple Grove, MN ($1.4 million) Barrings bank ($1.2 billion)
These absurdities will not go on forever. Unfortunately, those making money from these absurdities will not use their influence or power to change currencies for the better. Dollars to donuts say that America's elected and appointed policy-makers on currency have gained from derivatives which is why their rose-tinted visions will never end these destructive trends.
Gold or Life?
When it comes to currency reform, certain writers are obsessed with that four-letter word, gold. Gold is a bad currency. Understanding why points to a better currency which is also another four-letter world.
Before proceeding further, three points are relevant to defining a better currency. One, what is currency? It is the "common intermediate product by which people exchange their time in producing goods and services." Two, where does the word currency come from? It comes from the expression, "I'll pay you what your time is currently worth." Three, why was the Federal Reserve System created in 1913? To lubricate the production (worktime) for an economy constricted by currency based on gold and silver. The central theme in the three points is human time.
What makes currency good or bad? A number of qualities shows what is wrong with gold and points to a new currency. Frequently cited are usability, cost, durability, stability, counterfeitability, and convertability. Less appreciated is the role of currency on individual worth, national worth and monetary colonialism.
Ease of Use
Inflation and its semantic cousins means cheapening. Flattery is a cheap, phony compliment. Flatulence is a cheap symbol of the real substance. When inflation is understood as a cheapening of human time then the use of unemployment to fight inflation becomes suspect. Which cheapens a person's time more: employment with 1% inflation, or, unemployment with 0% inflation?
A good currency holds its value over time. If you save the equivalent of an average hour of human time at work then a good currency will be worth the same amount of life time at any point in the future. A more specific term than "time" for human currency is the human lifehour*.
When the current symbols of our life hours at work are not maintained at a stable value then our economy suffers. Good people misdirect their time into finding wealth from manipulating the symbols of our time, e.g., stocks, bonds and titles. They cease trying to solve real problems. In a zero sum world, each symbol gained from manipulating the symbols of human time or heads (capital) is a loss to the people who create the real wealth.
There is nothing wrong with becoming rich from building a better mouse trap. It's great. Everyone benefits. What's wrong is when the wealth comes from manipulating the money to buy mouse traps. Fewer and inferior mousetraps are built. A few benefit in a rodent overrun world.
How many medical advances have been delayed by the financial markets attracting our best minds to play one national currency against another? One international currency speculator derived an overnight income of $1 billion:
One night ... Mr. [George] Soros slept peacefully in New York while the British devalued the pound. He had made $958 million on his bet.
Now if this person had cured cancer or AIDS, $1 billion would not be enough reward for his solving real human problems. Currency instability is behind the derivative's fiascos, e.g., Orange County, California and Barrings Bank, England.
Politicians take heed: Money drained by manipulating symbols from local economies for luxurious lifestyles is the fodder of civil revolution. This gain of wealth is quite different from creating new wealth. (The latter is capitalism; the former is decapitalism.)
Gold is not a stable currency. New discoveries or private hoarding alter its availability, causing fluctuations in its ratio to other human production. The Federal Reserve's mandate for modifying the money supply is to provide stability in availability and value of currency. Gold is the currency of the foolish or greedy.
People currently overpaid will not like a currency directly linking the symbols of their time to the substance of solving real human problems. At the top of the list are the habitual politicians who would have to pay voters an amount equal to the national debt--their current worth. In this regard, they are not different than kings who re-minted coins after debasing them with lesser metals.
A good electronic currency would quantify a person's time. A doctor's time would be worth more than a high school dropout's time. Through a nationwide polling process, the relative values of human activities could be assessed in a democratic fashion. A person's activities in a given area would be rewarded with units of the new currency. If an hour of your life is worth two of mine then you would be rewarded with two life hours of the new currency.
Should it be any other way? If a society allows the least productive to be over-rewarded, then society's problem-solvers will drift toward the better paying, least beneficial activity. Welfare is an example of an overpaid, non-productive activity.
Money speculators play the differences in order to gain wealth. A country is really worth no more than the value of its citizens' time. If they spend time growing tulips then their human time will decline in value as starvation from deserted agriculture takes its toll.
An ideal currency will have an electronic system simpler than those used to play national currencies against each other. This electronic system will determine, as easily as banks determine their position in Federal funds, what a country's lifehour* is worth. Countries will exchange goods and services through their national lifehours.
The currency of the future will quantify the time of a country's citizens. Should a country's wealth be based on its citizens producing wasteful symbols, e.g., tulips or gold. Or, should a country's wealth reflect its ability to solve real human problems with surplus for international trade?
Unfortunately, the days of monetary colonialism are limited, for fewer and fewer countries remain from which to drain real wealth. As they have imported our inflation and unemployment, their economies have teetered over. Collapsed economies cannot support themselves let alone the colonial power that drove them to collapse. Justice is exacted upon the monetary colonialist: the economic junkie with imbalanced production suffers the greatest withdrawal pains.
Problem Solver or Causer
Electronic data lacks this short-coming. The currency of the future will be created with few, if any, problems. Ideally, it will be created by solving problems. When mined, gold causes problems. A better currency would be an electronic unit that comes into existence as a quantifier of people solving real human problems.
If the FED had created money through a public problem-solving process, we would not have a national debt right now. Instead of the FED lending money to banks through the discount window, it should have created new liquidity through real problem-solving. It's not too late.
With a currency based on solving human problems, one readily can see who is part of the problems or part of the solutions, i.e., "How many lifehours* do you have to your credit?"
Symbol or Substance*
By organizing people to regularly contribute lifehours to solving public problems, a new currency will come into existence. The currency should be named so that the symbols and substance are one and the same: the lifehour.
Characteristics of a needed, future currency
Easy to use: It's electronic.
The lifehour * is the best currency for mankind. How do we actually create it? What will it cost?
Really, it only takes a Timeclock/Payroll System?
The technological tools for the currency of the future not only already exists but are being used. A number of electronic timeclock payroll services exist. In fact, this writer created one called Touch-Tone Manager in use since 1989.
Think about it ... be honest and not greedy: Which currency system would you rather have:
Necronomics--Wealth comes from mining precious metals and printed paper with vast opportunties (derivatives) to legally steal by playing currencies againsts each other, or,
Ecos Nomos--Wealth derived from quantifying peoples' contributions to solving community and public problems with the created money going into their healthcare account.
Speculators in currencies and precious metals won't want the latter any more than the drug dealers will want legalization of drugs. With Ecos Nomos, the problems of healthcare and medicare financing would disappear. With currency reform based on public problem solving we can kill several birds with one stone. What kind of world do you want to live in? One founded on a currency derived from people helping each other or robbing/polluting each other?
Cost of Implementing The Lifehour*:
How much will it cost to set up 435 systems to handle the timeclock and payroll of each Congressional District? About $10,000 per district using a PC Network. How much will it cost to run each year? About $100,000. How much it will it save? Billions in lost taxes.
With a national payroll system, taxes would be automatically collected. Currently, the government loses billions in lost wage withholding for the income taxes and social security. By immediately getting its money, the government would save on interest costs.
Convert into Dollars
Universal, portable benefits
A reason for escalating health costs is the reduction of dedicated community servers: nuns. If there is a public problem that could benefit from this new currency, it is healthcare reform. By people working in their local healthcare system as part of their insurance premium, the costs would go down. Also, dividends would be gained by people seeing on a regular basis the results of poor prevention and unhealthy lifestyles.
* * *
In summary, it would be profane to return to a monetary standard based on that four-letter word, gold. A better four-letter currency standard, a weightless unit worth more than all the gold in the world, is time. Would you trade all your time for all the gold in the world? We would benefit by applying this attitude to our currency systems.
A universal payroll system that captures the value of a human's head at solving problems is capitalism in its purest form: capital, Latin for from the head.
Gold or Another 4-Letter Word
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