An Ideal Currency

[godislove]

Assume we want the average human to be as happy and living as sustainably as possible, and constantly improving our lot on Earth.  The key to achieving a goal is how we define our currency.  Our currency can lead our system-wide desires towards system-wide goals.  We can suffocate the economy with a restriction of money when it is heading in the wrong direction, and stimulate it when it is going in the right direction.  Even Hayek disliked a constant-supply currency like gold, preferring a basket of commodities. This prevents bubbles from forming and allows prices and wages to stay the same "number", which is important because there is a "stickiness" to the prices stores can charge and the wages companies pay.  The numbers written in contracts for building inventory need to be stable.  

All this is achieved very effectively with a basket of commodities.  Governments subsiding or taxing specific large industries for various good or bad reasons can be replaced by changing the weighting values for the underlying commodities in calculating a basket, thus biasing the results that the free market seeks.   The free market does not have any concern for human happiness or sustainability, only the individual parties engage in the immediate transaction.  Humanity has started with a free market many times and it always leads to a polarizing of wealth until society is destroyed.  That's why we have democracy.  A limited-supply currency might be OK, but in order to prevent a polarizing of wealth, a good and intelligent democratic republic is needed. This seems out of humanity's reach.

There is a better way than a simple basket of commodities.  I suggest supply that is equal to a basket of commodities such that the weightings of the basket are based on the things we need most to be happy, healthy, and sustainable.  Since we live in a limited-resource world, it should be per person.  

For a 3rd requirement of the currency supply, let me point out two things: 1) A diverse community is healthy.  2)  The wealthy are mostly wealthy by lucky and/or monopolistic positions that ride a wave of society's wealth and technological advancement rather than creating it on their own merit. Is any human 100 times smarter or more noble in objectives than the average human?  

So, the currency supply should be increase only if there is a more even distribution of wealth like the gini index, or more monitor medium income and wealth (not average), or develop happiness indexes as TED talks describe.  Let the rich manipulate the government all they want. Let them be smart and trick stupid people out of their votes.   If the currency is defined like this, everyone wins if the wealthy get wealthier, even the stupid people. The only problem is in preventing the wealthy from changing how the measurements are made.  The CPI, GDP, unemployment, and money supply are all disastrously manipulated numbers to make things look good.  So I do not have a solution for the 3rd party problem in issuing a currency.  But I do not even see discussion of this opportunity to increase human happiness and prevent biosphere destruction.

Defining the currency defines system-wide goals.  An aimless constant-supply currency will achieve exactly what it seeks: a world defined by the people who acquire the most of it, without any regard to biosphere destruction or human happiness.  Free markets seek overpopulation because they seek low cost labor.

So our world currency "stimulus" should be tied to directly proportional to:
1) a weighted basket of commodities to keep a constant value and prevent bubbles
2) per person to prevent biosphere destruction
3) times any increase in the median wealth or median happiness index

Technological progress will increase the supply of commodities which will increase the stimulus, but technological progress than increases the efficient use of the commodities will not increase the stimulus, unless it increases the median happiness level, as it should.  This system is a positive feedback loop, but only creates a sustainable and increasingly "happy" bubble.

The "stimulus" that would result if the 3-factor ratio above improves is money that the government simply prints.  You may object, but remember the government is not allowed to print unless the standard of living is improving.  And the place it spends the printed money is in places to help improve the ratio more.  So the more past investments help the ratio, the more the government is giving to print more. There is no tax, just printing.  However, if the ratio gets worse, the government taxes to make it better.  It does not spend it.  It just takes in the money and destroys it.  Basic government spending would be from interest on real estate loans, which is plenty judging by people paying 3 times the construction cost of their house in 30 years.  No Fed.

How you define the currency is the "invisible hand" of god.

[kjj]

Fortunately for us, no one put you in charge of anything important.

[jones31]

Read it , read it twice and almost started again but I stopped.
My brain told me that reading about the "ideal" plan might be a futile attempt from the beginning.

But still I don't understand the link between a currency and how can it prevent biosphere destruction and I would love to hear one link at least

[empoweoqwj]

I think an increase in "human happiness" is more likely to come as a result of some kind of pill than talking about currencies. Money doesn't make anyone happy. One of the great fallacies of 20th (now 21st) century "civilisation". When Japan was booming, it has the most suicides per capita than any country in the world.

[jones31]

I think an increase in "human happiness" is more likely to come as a result of some kind of pill than talking about currencies. Money doesn't make anyone happy. One of the great fallacies of 20th (now 21st) century "civilisation". When Japan was booming, it has the most suicides per capita than any country in the world.

Those "pills" can be bought with money , so a certain amount dedicated to that , like a daily basket would solve the problem right?
For the suicide part , Japan is so different is this thing to western countries because of their culture so you can't really compare it. Also the rate have increased lately while their economy is not quite booming right now.

[godislove]

Read it , read it twice and almost started again but I stopped.
But still I don't understand the link between a currency and how can it prevent biosphere destruction and I would love to hear one link at least

You reduce the quantity of the currency as the commodity production to population ratio decreases.  I do not have a reference because I thought of it and request readers to follow my logic rather than depend on an outside source, especially since we're talking about economics.  Concerning kjj's response, I would also like to see a rational counter-argument instead of an insult.

[kjj]

Concerning kjj's response, I would also like to see a rational counter-argument instead of an insult.

Then go read some old threads.  I'm pretty sure that I've refuted everything you said, when it was said by other people.  My post here was shorthand for "I've totally lost track of how many things in this post are either wrong or undecided".

[godislove]

Concerning kjj's response, I would also like to see a rational counter-argument instead of an insult.

Then go read some old threads.  I'm pretty sure that I've refuted everything you said, when it was said by other people.  My post here was shorthand for "I've totally lost track of how many things in this post are either wrong or undecided".

I've read some of your posts and noted their errors.  You can consider the above a correction.  

[jones31]

Read it , read it twice and almost started again but I stopped.
But still I don't understand the link between a currency and how can it prevent biosphere destruction and I would love to hear one link at least

You reduce the quantity of the currency as the commodity production to population ratio decreases.  I do not have a reference because I thought of it and request readers to follow my logic rather than depend on an outside source, especially since we're talking about economics.  Concerning kjj's response, I would also like to see a rational counter-argument instead of an insult.

So , you say that you're gonna control population with the currency?
Whats the hell is ideal in this?
And how can you do it? An example , of how you see it in action in real life.
Sprouting big words doesn't do any favor to your already hard to read text.
Show us how you envision this currency in real life , with examples.

[Foxpup]

The ideal currency is one which promotes free trade, which is what allows people with differing talents and abilities to obtain the things they want (when they're not good at making the things they want, but someone else is) by doing the things they're good at (when the thing they're good at doing produces things they don't want, but other people want those things). In free trade, currency flows from people who consume resources to people who produce them. The fair distribution of currency is for the people who consume the most resources to have the least money, and vice versa, which, incidentally, provides a clear incentive for people to conserve limited resources, and this is what actually happens when free markets are allowed to function without interference.

[kjj]

Concerning kjj's response, I would also like to see a rational counter-argument instead of an insult.

Then go read some old threads.  I'm pretty sure that I've refuted everything you said, when it was said by other people.  My post here was shorthand for "I've totally lost track of how many things in this post are either wrong or undecided".

I've read some of your posts and noted their errors.  You can consider the above a correction.  

Cool story, bro.

[godislove]

jones1,
The idea is to let the currency definition provide an incentive to the free market to control the population and the happiness level.  Individuals would not decide how to control population or happiness, they will only seek personal profit.  I do not know HOW the free market will figure it out.  Defining the currency only tells the free market where we want it to go.  The currency definition provides the system-wide incentive.  The tricky part is figuring out how to measure the population and happiness levels, and where to inflate and deflate the currency.  The inflation and deflation could be flat and system wide, but that seems to avoiding opportunity.  Doing too much would be too much like government because inflating and deflation the currency in specific areas is just another way of say subsiding and taxing.

The ideal currency is one which promotes free trade, which is what allows people with differing talents and abilities to obtain the things they want (when they're not good at making the things they want, but someone else is) by doing the things they're good at (when the thing they're good at doing produces things they don't want, but other people want those things). In free trade, currency flows from people who consume resources to people who produce them. The fair distribution of currency is for the people who consume the most resources to have the least money, and vice versa, which, incidentally, provides a clear incentive for people to conserve limited resources, and this is what actually happens when free markets are allowed to function without interference.

Yes, except who "produces"?  The miners or the shareholders?  In a feudal system, wasn't the landlord just the majority shareholder?  Yes, a feudal system was great at conserving resources, keeping the economy too miserable to overpopulate.  Democracy was the fix to redistributing the wealth along more equitable lines through taxes and law against the free trade system, so now we're able to destroy the biosphere in no time flat.  Except that now we don't tax the wealthy as much, so we're reverting back to a feudalism by destroying government with toxic assets and printing to save the banks. I'm a fan of government....if it wants to increase the MEDIAN wealth of its citizens.  Free trade is not "fair" because smart people can figure out how to game the system even if everyone agrees to each transaction.  Well, actually that is fair, in an evolutionary sense, and it can prevent overpopulation.  So yes, destroying the world's economy for the benefit of the smartest and letting all the stupid people die out is a great idea.  Then only the smart will breed and the process starts all over again.  On the other hand, working together might offer a better solution than tempting the farmers to raid your mansion with pitchforks.  That's why I am suggesting a different definition of currency.

[Johnny Bitcoinseed]

You write: "The wealthy are mostly wealthy by lucky and/or monopolistic positions that ride a wave of society's wealth and technological advancement rather than creating it on their own merit".

So what you are saying is that my business, the business I spent years building from scratch with no money from anyone else, my business that has made me wealthy from years of 80-hr work weeks and financial risk, useful and unique inventions I came up with that provide local manufacturing jobs and payrolls, and blood sweat and tears providing valuable services and goods to tens of thousands of people....what you are saying is

I Didn't Build That

Also, what you are telling me is

I don't deserve the wealth I earned.

You are saying is I was just "lucky"

And implying that I must be forced to hand over the wealth I earned to people who did not earn it.

YOU FAIL

The fact is, the vast majority of wealthy people in America actually earned their wealth.  Yes, it is a sad fact that most millionaires own businesses like car washes, small construction firms, small local factories, shopping stores, etc.

They are your neighbors, the guy you see bowling on Saturday nights, someone pushing a shopping cart at your local grocery store.  They are wealthy and you do not even know it and they became wealthy by good old honest labor and invention that provide jobs and innovation to all of society.

So get your facts straight and stop babbling on about topics you no nothing about, please.

[godislove]

The question is not if you suffered or not, but if you added value to society equitably, and in most small business cases that don't lie and cheat, I think the answer is yes.  However, your suffering has a negative impact on yourself and others around you, so that decreases the value to society that you added, so I hope your suffering is not equal and opposite to what you gained.  I also hope you do not use the righteousness of your pain to extend the pain to others.   Is the profit you've gained from bitcoin also equitable to the rest of society?  

One might gain a great deal of wealth and not even "deserve" it, but if the wealth is re-invested in such a way to help society even more, then all the better.  I do not view charity as good for society, but my views on government might be considered charitable to the median wealth by at least the upper 1% of wealth holders.

[jones31]

The question is not if you suffered or not, but if you added value to society equitably, and in most small business cases that don't lie and cheat, I think the answer is yes.  However, your suffering has a negative impact on yourself and others around you, so that decreases the value to society that you added, so I hope your suffering is not equal and opposite to what you gained.  I also hope you do not use the righteousness of your pain to extend the pain to others.   Is the profit you've gained from bitcoin also equitable to the rest of society? 

One might gain a great deal of wealth and not even "deserve" it, but if the wealth is re-invested in such a way to help society even more, then all the better.

No offense , I know what you're trying to say but you should stop writing like this.It is a pain in the ass for some to understand.
But , you're begging to sound like some communist , and I must tell you , this everybody is happy thing didn't work at all in my country.
If not it had the total reverse effect.

[godislove]

Equality vs Equity. More forced equality = less incentives = less technology and advancements = lower average happiness
Ending with a note on religion isn't the best idea either.

I do not want higher average happiness (or wealth).  I want higher median happiness (or wealth).  Forced equality = higher median wealth .... by definition.  I'm an atheist, so I feel comfortable referring to God as a metaphor.

It's not communism because I want capitalism under the guidance of the currency definition to determine the end result instead of leaving it up to a blind and aimless evolutionary process.

[empoweoqwj]

I think an increase in "human happiness" is more likely to come as a result of some kind of pill than talking about currencies. Money doesn't make anyone happy. One of the great fallacies of 20th (now 21st) century "civilisation". When Japan was booming, it has the most suicides per capita than any country in the world.

Those "pills" can be bought with money , so a certain amount dedicated to that , like a daily basket would solve the problem right?
For the suicide part , Japan is so different is this thing to western countries because of their culture so you can't really compare it. Also the rate have increased lately while their economy is not quite booming right now.

Happiness pills don't exist yet. Sure, you can get pills that make you happy for a short time but then you get the "down" part. True happiness pills will elevate mood permanently, and they are being worked on globally. Whether elevating peoples' moods permanently is a a good thing or not we will leave for a different discussion.