4 ms·

Interesting take. I’m not sure many would agree with you. Care to expand or point us somewhere where your ideas are expanded?

by rytill 5y ago

0xcde4c3db 5y ago
I'd be interested too. I've seen takes loosely along these lines before, but my familiarity is pretty shallow and I don't remember specific sources. There's a line of thought that traditional pro-capitalism analysis of the "economic calculation problem" would tell us that a massive corporate retailer like Walmart should be mired in inefficiency compared to retailers with more localized authority (e.g. regional or franchised chains). Since that's not what we see, something must be missing from the analysis. For example, some have proposed that technological advancements (in fields including telecommunications, logistics, and accounting) have made centralization radically cheaper and more effective since the 1980s or so.
pphysch 5y ago
I was being provocative -- finance will not totally disappear, but it will play a greatly diminished role in human economies. Successful national economies will adopt a tech-driven, centralized approach to economics. The global, eternally-fungible USD, and all the problems it brings, will cease to exist. Non-transferable, expiring, digital currencies may be employed in limited domains, for example "food credits" or "fuel credits". This means that free markets will still exist much like today, you can shop for whatever food you want, but you now can't use your "food money" for e.g. financial speculation or buying a new car. This unlocks UBI as a practical solution to many societal problems. You can give everyone $250 foodbucks a week with 1 month expiration and not worry about massive financial fraud & waste. Price mechanism still works, food industry is still competing for your foodbucks which would be converted into some other representation of economic value upon purchase. Libertarians will lose their minds at this, but frankly the nations that adopt a centralized tech-driven economy will vastly outperform those still based on legacy financial systems. In fact, they already are beginning to. There is so much waste in the current American economy and yet most Americans are still struggling to pay rent and put food on the table. The alternative future is the one described by DeFi/web3 crowd, which is essentially based on a deep misunderstanding of what finance and money is about and how they relate to the actual economy. They tend to view economics as a subset of finance ("fix the money, fix the world") when really it's the other way around, and finance itself is nonessential.
- rytill 5y ago
  What an articulate description of your views. Thank you! I know it was only a subset of your comment, but I’m very curious how an expiring subcurrency would function in an real economy. How would you propose regulations work for a food credits “black market”, e.g. I will pay you 150 general-purpose capital credits for your 200 food bucks? Would non-digital cash be completely done away with? What about objects of value that could be given to others? Would the transfer of expiring assets for non-expiring assets be prohibited? What about favors and more subtle ways of transfer? How would food credits be legitimately redeemed? Would a small shop that complies with policy be able to instantly convert a food credits profit into capital that they could use to expand their business?
  - pphysch 5y ago
    All of these limited currencies would exist on a centralized government platform; no physical currency. There would be no third-party ability to create/transform these currencies. So all swaps/trades would have to be done on the official platform or via its APIs, which you could of course integrate into third-party websites. The govt could even run markets (with tariffs to discourage volatility) to swap between different currencies. Frankly, >90% of the tech infrastructure is already here in America between corps like Amazon and Stripe. We just need to go the extra mile to "nationalize" these corps and integrate them into one huge economic system. A monumental task, to be sure. But the road is already being paved by less liberal nations.

Interesting take. I’m not sure many would agree with you. Care to expand or point us somewhere where your ideas are expanded?

by rytill 5y ago

Interesting take. I’m not sure many would agree with you. Care to expand or point us somewhere where your ideas are expanded?

0xcde4c3db 5y ago

I'd be interested too. I've seen takes loosely along these lines before, but my familiarity is pretty shallow and I don't remember specific sources. There's a line of thought that traditional pro-capitalism analysis of the "economic calculation problem" would tell us that a massive corporate retailer like Walmart should be mired in inefficiency compared to retailers with more localized authority (e.g. regional or franchised chains). Since that's not what we see, something must be missing from the analysis. For example, some have proposed that technological advancements (in fields including telecommunications, logistics, and accounting) have made centralization radically cheaper and more effective since the 1980s or so.

pphysch 5y ago

I was being provocative -- finance will not totally disappear, but it will play a greatly diminished role in human economies. Successful national economies will adopt a tech-driven, centralized approach to economics. The global, eternally-fungible USD, and all the problems it brings, will cease to exist. Non-transferable, expiring, digital currencies may be employed in limited domains, for example "food credits" or "fuel credits". This means that free markets will still exist much like today, you can shop for whatever food you want, but you now can't use your "food money" for e.g. financial speculation or buying a new car. This unlocks UBI as a practical solution to many societal problems. You can give everyone $250 foodbucks a week with 1 month expiration and not worry about massive financial fraud & waste. Price mechanism still works, food industry is still competing for your foodbucks which would be converted into some other representation of economic value upon purchase. Libertarians will lose their minds at this, but frankly the nations that adopt a centralized tech-driven economy will vastly outperform those still based on legacy financial systems. In fact, they already are beginning to. There is so much waste in the current American economy and yet most Americans are still struggling to pay rent and put food on the table. The alternative future is the one described by DeFi/web3 crowd, which is essentially based on a deep misunderstanding of what finance and money is about and how they relate to the actual economy. They tend to view economics as a subset of finance ("fix the money, fix the world") when really it's the other way around, and finance itself is nonessential.

rytill 5y ago
What an articulate description of your views. Thank you! I know it was only a subset of your comment, but I’m very curious how an expiring subcurrency would function in an real economy. How would you propose regulations work for a food credits “black market”, e.g. I will pay you 150 general-purpose capital credits for your 200 food bucks? Would non-digital cash be completely done away with? What about objects of value that could be given to others? Would the transfer of expiring assets for non-expiring assets be prohibited? What about favors and more subtle ways of transfer? How would food credits be legitimately redeemed? Would a small shop that complies with policy be able to instantly convert a food credits profit into capital that they could use to expand their business?
- pphysch 5y ago
  All of these limited currencies would exist on a centralized government platform; no physical currency. There would be no third-party ability to create/transform these currencies. So all swaps/trades would have to be done on the official platform or via its APIs, which you could of course integrate into third-party websites. The govt could even run markets (with tariffs to discourage volatility) to swap between different currencies. Frankly, >90% of the tech infrastructure is already here in America between corps like Amazon and Stripe. We just need to go the extra mile to "nationalize" these corps and integrate them into one huge economic system. A monumental task, to be sure. But the road is already being paved by less liberal nations.