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The problem with our capitalism is our money. Currency is a means for us to socialize debts so we can make trade more efficient. When you give Steve money, you
by natrius 11y ago
The problem with our capitalism is our money.
Currency is a means for us to socialize debts so we can make trade more efficient. When you give Steve money, you're saying, "my people, Steve has provided me $30 of value, so please reward him in kind." Instead of having to give Steve $30 of value directly in return, we communicate that $30 debt to the rest of society with our money.
The problem with our currency is that it forces everyone to honor the debts of every other person on the planet. There are people who destroy our environment, manipulate our politics, and deceive our people in order to earn rewards, and we're all forced to reward them because we can't identify whose socialized debt we're honoring when we reward people in exchange for money.
If we always knew whose debts were being honored, any individual could refuse to honor the debts of people they believe are harming society. You could effectively turn off people's money if they're behaving poorly. No one would work for you if they think others won't honor your debts. If you don't honor the debts of polluters, polluters lose their purchasing power and go out of business. Similarly, pharmaceutical price gougers, war profiteers, and harbingers of financial crises would have powerful disincentives.
This enforcement mechanism would incentivize socially harmonious behavior without requiring consensus on what socially harmonious behavior is. We'd have a market mechanism for social behavior, which would prevent many of capitalism's failures.
We could also prevent wealth accumulation by deciding that recent value transfers are worth more than older value transfers. This is something that people actually believe, but there's no way for our money to express that the work you did twenty years ago doesn't mean as much as the work you do today. A pleasant side effect of codifying this truth is that we could avoid the zero lower bound on interest rates that's making it hard for the world to reach full employment. If unemployment is high, just increase the value of recent work so there's a bigger incentive to put people to work.
Instead of paying people based on how much money they have, you'd pay them based on their merit, calculated however you decide as an individual.
All we need to implement merit capitalism is a ledger of who has provided value for whom to replace our currencies that obfuscate that data. Blockchains give us the power to build this ledger.
- dwpdwpdwpdwpdwp 11y agoThis might be a bit tangential, but these ideas remind me of the importance of voting with ones dollars (as well as ones time). As an American I find that the freedoms I enjoy to spend my money how I like contribute far more to my sense of participating in a democracy than do my occasional trips to the voting booth. It's the reason I can't bring myself to follow the often repeated financial advice to stick your money in an index a fund and then leave it there; I refuse to vote for the behavior so many of those companies engage in.
- ghthor 11y agoThis is a really amazing idea AND it's something that is very technically possible. Is this an idea that you've formulated yourself? I'm very curious about your journey to this idea.
- natrius 11y agoI thought this up last week, but I wouldn't be surprised if I'm not the first. It's a combination of a few popular ideas. The financial crisis got people thinking critically about what money is, especially the people who hopped on the Ron Paul boat back in the 2008 election season. (I hope you'll hear me out even if you consider those folks to be crazy people.) That's when I first understood that money is debt. Bitcoin gave us blockchains: the ability to create ledgers that we can agree on without authority. You send transactions to move amounts in the ledger. Ethereum allows us to create arbitrary transaction types that modify the state that transaction type controls. The Clojure and React communities got me thinking more about different ways to think about state. State is the result of transactions, and if you keep either the transactions or the previous states around, you can control time in your program, among other things. Apache Kafka, Samza, and related projects introduced me to the concept of a database as a transaction log. One potentially useful application that my coworker pointed out is that we could write events to a Kafka database, then change what they mean later. State is a function of a list of transactions and a transaction processing function. You can change your transaction processing function at any time. Anyone who has the transactions can build their own view of the world with a function they define, so everyone can have their own calculation of merit, for instance. I've thought for some time that while governments are useful, it'd be better if we could find ways to achieve the same ends without giving anyone power over us. I've been exploring ways to use blockchains to give society the power to self-organize and provide the things we currently need governments to provide for us. Merit capitalism is a combination of those ideas, and probably more parts of the idea soup in my brain.
- walterbell 11y agoHow do you deal with the analytics/computation/HFT asymmetry available to those who earned fortunes under the anonymous-currency regime, from overwhelming new generations who must live in a cashless hampster wheel of negative interest rates, no transactional privacy and gamified behavioral nudges?
- natrius 11y agoHow can yesterday's wealthy overwhelm new generations? Yesterday's wealthy don't have anything I need besides maybe land, which we could solve separately if we wanted to. They have money, but if they overwhelm new generations with money, we'll turn their money off. Most of society lives in a hamster wheel already. It's what we call having to work for a living. Valuing recent work over older work just puts the wealthy back on the hamster wheel with us, and it will make society more wealthy since everyone has to keep contributing to our total wealth. Transactional privacy is undeserved. When you spend money, you're putting the rest of society on the hook for the goods or services you just bought. We want to know who you are so we can decide whether we want to honor your debt. If you don't want to tell us, you're free to barter.
- euroclydon 11y agoThis does happen: Drug Dealers, Iran.