Universal Dividend

[Red]

I think we had the same idea Liberty.

I was considering posing for discussion a currency with the following monetary policy.

1. At birth every real human person is given 100 "birthcoins" bTC.
2. On death of each real human person 100 bTC is removed from circulation.

In such a system, the quantity of currency would grow in direct proportion the the number of people. In effect, "Our money is backed by ourselves."

My goal was to remove the tyranny of time for the new comers, but maintain "sound money" principles.

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People will argue about, how you remove bTC from circulation. Having the government burn it from the collected tax revenue makes sense.

However, I came up with another way in my head. I think this is what the universal dividend is touting. But I might misunderstand it. I was reading an auto-transalated version. Galuel please correct me if I'm wrong.

What if we couldn't come up with a "fair enough" way to ever remove money the dead people's money from circulation?

In that case what we would need to do is keep a running count of how many people had been born (B) since the start of the currency. (i.e. The total number of allocations of 100 bTC.) We would also need to keep a count of how many people had died (D) in the same time period.

Then we would simply make new birth allocations using this ratio so the relative allotment per birth doesn't diminish over time. Let's call these coins "Inflating Birthcoins" (IBC).

The birth allocation ratio would be = (B)/(B-D)  It's simply the amount of bTC ever created divided by the current population. When someone is born, that is the share of currency that *represents* their birth. By its nature that would be an ever increasing ratio. But for any moment in time let's call it the "universal standard" for equality.
Each birth dynamically generates (100 IBC * B)/(B-D) and that amount is put in an account for the new baby.

So at any point in time, you could measure your wealth against my originally stated monetary policy at the top by using the inverse ratio = (B-D)/(B)   That dynamic ratio always takes you back to "universal stand currency".   (100 bTC = 1 person)

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I would call both IBC and bTC "sound money" because neither is randomly inflating based upon outside whims. But I may be misunderstanding the definition others use for sound money.

And though there is monetary inflation of Universal Standard Currency as the population grows, there are no "Progressive" policy goals. Simply stability goals.

My aim for the system would be that if a loaf of bread cost (1 bTC) in your grandfather's generation. It would cost (1 bTC) in your grandchildren's generation. Of course it would cost a lot more in IBC, but using the universal standard ratio, everyone could see that things were remaining stable.
The previous statement was a mistake. The system proposed here is obviously a "price deflationary" system. As there are productivity increases, the total commodity value will grow relative to the total currency. Just as with bitcoin.

Given the electronic nature of birthcoins, it is actually trivial to do all the accounting in IBC internally, but to always display prices and trade in uBC. That keeps people from having to change paper price tags every time a few people are born.

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[NewLibertyStandard]

Galuel, I was thinking about per individual when I said "and possibly to have that rate modified by difficulty of generating a verified block." In the current system, the best way to estimate an individual is by the amount of CPU cycles of an average individual. Unfortunately that average increases with time. Of course a different system could use other measures to determine the actual user count. One of the documents I read mentioned different suggested inflation rates and the 5% was recommended over the others and that's why I mentioned it. I also read about other related stuff, but I'll save that for another time. The article you pointed out was a good starting point for the topic.

Red, I don't see any way of reliably linking one account to one human in a decentralized system. Once you settle for a centralized system, the possibilities for economic policy is pretty much limitless. Of course it's always going to be limited by the degree to which people trust or are dependent on or are at the mercy of the central authority.

[Red]

Galuel:

What is "Progressive Cooptation". Also I'm not sure I'm understanding your use of "Cooptation". That is a word I haven't seen in common US English.  Could you define both for me please?

Also, I used you as an example in another thread. Just FYI.

Also, you called yourself "deeply liberal". That may not translate into US English as you expect it to.

In the US we have a scale that theoretically goes "Left" to "Right".  (Forgive me Libertarians, but you tend to draw yourselves off the scale as part of a triangle.)

Communist -> Socialist -> Liberal -> Conservative -> Fascist

However, in common political usage here we only use two terms. "Liberal" often associated with Democrats. "Conservative" often associated with Republicans.

When Europeans say they are "more liberal" they often mean, "less socialists". But in the American mind that makes them WAY LEFT of mainstream Democrats here. And it doesn't sound anything like our equivalent phrase "I'm more conservative".

[Galuel]

@red

There is no absolute reason to prefer stable inflation rate for money creation better than allowing credit to new ones taking from old ones, mathematically, but there are lot of psychological reasons :

- Everyone should be incited to invest and succeend earning more money, it's possible to have 100% winners in Universal Dividende and only 50% maximum in stable money...

- Taking money to people is not welcome... People always do all possible to avoid it...

- Creating money for all is better welcome. All the peole is ok to receive more money, but the reachest will probably buy something instead of keeping too much money would COULD lose "value" (relative thing, because of investment could generate new value unexpected next day...).

- Economy generally growth. I we compare times, for sure I prefer to live in 2010 than in 1850, even if in 1850 I could be relativly reachest compared to the other peole, I see myself richest of 99% of all people of 1850, I live longer, I can use internet, medical technology, travel by train, and can also dream of a fly in Space... So money grow with economy because next human generation will be proprietary of better goods than ours, and so will need more money to exchange it, time after time, and progressivly, as innovation replaces old goods.

- Growing (but slow growing) dividend is the only fixed common value we could all be sure, anything else depending of the sum of global work each one will done. It's difficult to generate confidence in a system where ALL the things can change at any moment because of births and deads etc... At least, a little amount of money is sure.

We also have to think about people who don't think about money system. Could be genious people generating great value for all, and we need, I think, giving them some stability at minima, representing by our common money : a fixed rate dividend of global growth, whatever growth will be.

[Galuel]

Red, I don't see any way of reliably linking one account to one human in a decentralized system. Once you settle for a centralized system, the possibilities for economic policy is pretty much limitless. Of course it's always going to be limited by the degree to which people trust or are dependent on or are at the mercy of the central authority.

A system of cooptation vote is possible : for instance if 30% of the members vote for newcomer (thru their own interface), he comes in.

Decentralized, doesn't mean without collectivity control about money, which is a collective agreement !

[Galuel]

What is "Progressive Cooptation". Also I'm not sure I'm understanding your use of "Cooptation". That is a word I haven't seen in common US English.  Could you define both for me please?

It means that during time an acceptable number of newcomers can come in (progressive), after aproval of an amount of full members (cooptation). This is to be sure of a new individual identity coming in, and not a duplicate one, or whatever...

Also, I used you as an example in another thread. Just FYI.

Also, you called yourself "deeply liberal". That may not translate into US English as you expect it too.

In the US we have a scale that theoretically goes "Left" to "Right".  (Forgive me Libertarians, but you tend to draw yourselves off the scale as part of a triangle.)

Communist -> Socialist -> Liberal -> Conservative -> Fascist

I can define : I want as much liberty as possible for individuals, and a state in charge of organising ONLY BUT GOODLY justice, education, and security, and of course "fair money", avoiding too much power concentration (anti-trust), which is an objective of long term we didn't acheive in Europe (too much state power), neither in US (too much money stolen thru centralised banks power).

I like countries organised like Holland, Swizerland or Spain. i also like US in many aspects, but not about money policy.

I consider our liberty is always relative, because it depends on other's liberty, and certainly of next generation's one.

[kiba]

I can define : I want as much liberty as possible for individuals, and a state in charge of organising ONLY BUT GOODLY justice, education, and security, and of course "fair money", avoiding too much power concentration (anti-trust), which is an objective of long term we didn't acheive in Europe (too much state power), neither in US (too much money stolen thru centralised banks power).

Anarchists don't like the idea of the state handling justice, education, security, or monetary policies. In fact, they don't want the state to handle anything at all. In addition they're anti-democratic and opposed to the idea of majority rules.

As we can see, you were hardly able to get any traction with your ideas because the underlying ideology generate incompatible ideas. Your refusal to understand libertarian ideologies has make your ideas more unpalatable than usual.

[caveden]

No, there must not exist universal positive rights since they violate the principle of self-ownership. And the only way to ignore the principle of self-ownership without creating an ethical code completely incoherent to the human nature is to establish a society where some own others. That's normally considered unethical by definition. Try reading this: http://www.lewrockwell.com/hoppe/hoppe11.html

If self ownership exist who earn the earth ?

Who earn USA ? Descendant of Native Indians so ?

Have you read the text I indicated? Had you done it you wouldn't be asking such questions.

Self-ownership created Latifundios in South America under Spanish period http://fr.wikipedia.org/wiki/Latifundio ...

Don't say bullshit. Self-ownership was never respected in Latin America.

Self-Ownership is detmined by the Collective Onwership which decide to allow or not some part of private ownership under certain rules.

There is no such a thing as a "collective" capable of taking decisions. Only individuals and, by extension, institutions can make decisions. The "collective" can't make a decision.
If you can't make decisions, you can't own anything.

There is no such a thing as "public property". There is only "state property". And if you assume that the group of people that is in the state is the owner of everything within a certain imaginary line called "country", you are not respecting the basic idea of every individual having the same set of universal rights.
Just read the text I linked, it explains better than I can.

No. The law can impose you to do some things, like paying taxes for using collective goods that are : The space you live in which is not your, the justice, the security, and some collective investments. You must do that or you will have problem, because it's denying the fact you don't live alone, but into a collectivity.

Taxes are theft. I've already wrote about "collective goods".

That's the role of democraty, and laws. Society change his point of view and change the common direction it wants to take by this way.

You seem to really believe in the dictatorship of the majority. That's not only unethical as any other dictatorship, as it has some horrible incentives in it you probably don't see.
Every law that does extreme good for a little bunch of people and that harms just a little a wide, big and disperse group of people will always be approved, even if the net balance is way negative. No wonder why the current monetary system is so awful, no wonder all these financial laws etc

So you cannot separate a money system from the collectivity using it, and the laws inside that community. If collectivity decide what you are doing is against its stability, against its own volontary decision, it will stop you.

Again, collectivity isn't going to decide anything. Governments, they might. (but I don't think they'll manage to stop bitcoins that easily ;-))

Regards

[Galuel]

Again, collectivity isn't going to decide anything. Governments, they might. (but I don't think they'll manage to stop bitcoins that easily ;-))

By joining any money system, you approve a collective rule... You're part of the collective decision.

[kiba]

Again, collectivity isn't going to decide anything. Governments, they might. (but I don't think they'll manage to stop bitcoins that easily ;-))

By joining any money system, you approve a collective rule... You're part of the collective decision.

You're in agreement with X individuals. Or you're in agreement with Group X that is composed of individuals who is in agreement with each other.

Generally speaking, bitcoin users agreed with each other pretty much 100% since they all run the same software. When the bitcoin community decide on something other than running nodes and the like, it means that approximatively 90 to 95% of the community decided to do something, or at least there's a large number of individuals doing something about it, and there's no opposition.

From a human point of views, individuals are the atomic decision makers. Groups cannot act, think, or taste. Individuals can think, act, or taste. A group's action that is seemly in harmony is an aggregation of thousand of individual decisions that happen to agree with each other. Within groups, there are dynamics, incentives, and disincentives, that individuals act upon. If the dynamic is not right, individuals won't act in harmony.

Groups are an abstraction, a nice categorizing system that people often abuse to ignore the fundamental reality of human actions and the often messy reality of group dynamics.

That is why you cannot say that Google is wholly categorically good or bad, despite people saying such things. This is why you see things like Google having the ball to face the Chinese, or Google compromising with Verizon. Different people in different part of the companies can act differently.

Some anarchists are Frenchmen, but it is not possible to say that they identified with and support the states because they're French nationalities.

[Galuel]

From a human point of views, individuals are the atomic decision makers.

That's exactly definition of Universal Dividende as monetary creation on the only universal basis of all human acts : individual, present, and future member of the economic collectivity.

[kiba]

From a human point of views, individuals are the atomic decision makers.

That's exactly definition of Universal Dividende as monetary creation on the only universal basis of all human acts : individual, present, and future member of the economic collectivity.

I won't brother to understand what the hell is Universal Dividend, other than it's some kind of basic income that maximize an individual's version of fairness.

There can be no collective that act or thinks, only individuals.

[Galuel]

There can be no collective that act or thinks, only individuals.

There is no individual that act or think, only a collection of brain atoms excited by complex past and present conditions, which generate some "ideas", "dreams", "images", "fears" or "desires".

I see nothing else, no "individual" exist, it's just a convention of denomination of a phenomenom, as collectivity is.

[Red]

Red, I don't see any way of reliably linking one account to one human in a decentralized system.

Yes, agreed. Absent of outside verification, there is no know way to assure one-and-only-one account is created for each human.

However, we do have outside verification. Each state tracks births and issues birth certificates. It does the same for death certificates. The world outside bitcoin including the legal system relies on these certificates. Even the federal government relies on these certificates when they create social security numbers.

Since there are 50 plus entities doing this, I'd call it a decentralized system. Though one made up of mutually trusted peers. So there does exist a decentralized system that can serve this function. However, I do accept your assertion that such a function cannot be arbitrarily decentralized and still remain verifiable. (a la bitcoin)


But given that there is a plausible way to create a trusted mapping of initial accounts, births and deaths, I'd argue that my hypothetical is well supported enough for discussion of its monetary policy benefits relative to other monetary policies.

Once you settle for a centralized system, the possibilities for economic policy is pretty much limitless. Of course it's always going to be limited by the degree to which people trust or are dependent on or are at the mercy of the central authority.

Yes, I'll stipulate to that. However, I'm not as skeptical of central authorities as many Libertarians. Nor am I as trusting of central authorities as many Liberals/Socialists.

Generally I trust individuals to act in their own self-interest. But contrary to what Liberals believe I see clear evidence that un-coerced cooperation is self-perceived as being in ones self-interest. I find this true of rich and poor people alike. Cooperation is simply fundamental to human nature. Even for Libertarians like me who want to retain the fundamental right to be uncooperative.

[kiba]

There can be no collective that act or thinks, only individuals.

There is no individual that act or think, only a collection of brain atoms excited by complex past and present conditions, which generate some "ideas", "dreams", "images", "fears" or "desires".

I see nothing else, no "individual" exist, it's just a convention of denomination of a phenomenom, as collectivity is.

Those brain atoms generate a sense of self, an individuality. Our neurons cannot be linked together with other brains to create a collective brain and collective scenarios.

Even when there are cases of brain merging, the two individuals retain their own memory and sense of self.

[bytemaster]

Let me ask a fundamental question.   What is your stance on people who opt not to use your currency?    Will you make it legal tender and outlaw everything else?

If you do not make it illegal to use anything else then the rich simply will not store their wealth in your currency.   If you do make it illegal, on what moral ground?  Do you prevent the rich from buying in gold and making contracts in gold?   

Any system you come up with must compete with all other systems or use force to shut them down.  If you were to create a universal dividend of some kind, I would gladly sign up for it, take the cash and buy gold.   Anyone else with any sanity would do the same.   

Let me ask you another question... say your dividend was 200% or 1000%?   Why 5%?   

Arbitrary laws and forced wealth redistribution schemes never survive if a competing system is available.   Thus, to implement your system requires that you control the guns and that you threaten the population to comply with your system.  So, unless you are willing to *kill me* and everyone else on this board for disagreeing with you, you system is fundamentally flawed and not sustainable.

[Red]

There is no absolute reason to prefer stable inflation rate for money creation better than allowing credit to new ones taking from old ones, mathematically, but there are lot of psychological reasons :

I'm learning that what you think are "psychological benefits" I see daily evidence of being "psychological drawbacks".

- Everyone should be incited to invest and succeend earning more money, it's possible to have 100% winners in Universal Dividende and only 50% maximum in stable money...

Stipulated: that ONLY investing currency should cause an INCREASE in net value to you. You're hoard of currency shouldn't work when you are not working.

However, your 100% winner statement is either absolutely wrong or absolutely unsupported.
If you increase currency levels 5% and prices increase 5%, then each equivalent share has exactly the same commodity value. If 1.00 original coin bought a loaf of bread before. 1.05 in inflated coin will buy a loaf of bread.

Because you gave "something" to everybody doesn't make the process a "win" for everybody.

The rich lost in their personal value as measured in loaves of bread.
The poor won in their personal value as measured in loaves of bread.

You know this, so I presume the deception was on purpose for persuasive effect. FAIL

- Taking money to people is not welcome... People always do all possible to avoid it...

I think you mean "taking money from people. I do welcome others taking money to me! :-)

But stipulated. People don't like taxes.

- Creating money for all is better welcome. All the peole is ok to receive more money,

Again this is a deliberate deception. It still fails on me.

Creating money is welcome to those without money. Not to those who value money as a commodity. It doesn't matter to me if I receive more money, but still lose value. That concept only effects the naive or stupid. That is often why they don't have money to begin with.

but the reachest will probably buy something instead of keeping too much money would COULD lose "value" (relative thing, because of investment could generate new value unexpected next day...).

This is an argument in favor of "price inflation". Since it makes rich people's currency worth less, they will spend it on things that either 1) generate additional currency to make up for the loss or 2) commodities that increase in value as measured by the currency.

Stipulated: This makes it EASIER and CHEAPER for smart people with productive ideas to borrow money and create additional commodity wealth.

Woot! A point of personal agreement! Don't make it unnecessarily hard for smart people to move quickly.

- Economy generally growth. I we compare times, for sure I prefer to live in 2010 than in 1850, even if in 1850 I could be relativly reachest compared to the other peole, I see myself richest of 99% of all people of 1850, I live longer, I can use internet, medical technology, travel by train, and can also dream of a fly in Space... So money grow with economy because next human generation will be proprietary of better goods than ours, and so will need more money to exchange it, time after time, and progressivly, as innovation replaces old goods.

NOTE: I just notice I made an error in my previous post. I'll fix it momentarily.

Stipulated: Everyone is richer on a per-capita basis when using a ratio that compares (total commodity value in existance)/(number of people currently alive)

This ratio increases not with mere production increases, but instead with productivity increases. (i.e. each person produces more value now than they did then)

In my proposed system you still continue to get richer in total commodity value. However, prices drop so it takes less currency to buy a loaf of bread. (This was a mis-statement on my part previously).

- Growing (but slow growing) dividend is the only fixed common value we could all be sure, anything else depending of the sum of global work each one will done. It's difficult to generate confidence in a system where ALL the things can change at any moment because of births and deads etc... At least, a little amount of money is sure.

I don't understand this. Can you restate it?

We also have to think about people who don't think about money system. Could be genious people generating great value for all, and we need, I think, giving them some stability at minima, representing by our common money : a fixed rate dividend of global growth, whatever growth will be.

This is confusingly stated, but it seems like a purely standard liberal political platitude.

I couldn't disagree more strongly, but I am quite certain even your average "right winger" in France would seem a "leftist" when measured relative to where I live.

So my general response is, if I am "one of those people generating great value for all" then no. Hell no, does it make any sense at all for me to create great value for you, then to have you take my share of the value I created also.

This requires an example.

Say, I create a process for baking bread that uses less than half of the energy, time and man-power than the existing process. Using my new process I bake bread faster than most others. Now there has been BOTH an increase in *production* and an increase in *productivity*.

Because of the increase in productions, YOU and everyone else "receives great value" because the price of bread fell by half. So the money you already own buys twice as much bread. That is huge value for YOU.

But the productivity increase is the root of MY value. I baked more bread than others, I sold it at a lower price than they did, and still took some profit for myself. That value is MINE. I deserve every bit of it. If I want to give it away, that is MY business not yours.

I assert with all possible strength the following statement:

IF I increase my own personal productivity and/or the productivity at of others, while at the same time bringing society as a whole additional aggregate and individual value as a direct result of my increased production,...

THEN, there exists NO MORAL REASON for you to take ANY of the value I gained as a result of my productivity invention. In European terms, I would say I have "moral rights" to my creations and to profit from them. Exactly the same moral rights as if I had written a book, or made a sculpture.

[Galuel]

Any system you come up with must compete with all other systems or use force to shut them down.  If you were to create a universal dividend of some kind, I would gladly sign up for it, take the cash and buy gold.   Anyone else with any sanity would do the same.

Exchange anything has some value for you. I don't need gold, and don't want, it doesn't matter for me gold, or any value you think it's value it's your point of view not mine. And my point of view today is not the same as tomorrow because value change every day and is different in space and in time.

say your dividend was 200% or 1000%?   Why 5%?

Because the process of money creation has to respect the more stability possible (low inflation rate from the beginning to infinite), as well as respect next generations of members. Life expectancy is 80 years, and to reach of 1/N equal sum of buy power (BP) of the created money between N members of different generation of people, 2%/year is too low (BP = 1/N * 79% with 21% of inequity), and 5% / year is fine (1/N * 98%). As low as possible + time equity with an 80 years life expectancy converge towards 5% / year as near the best compromise.

The good inflation rate for the Dividend depends of life expectancy.

Universal Dividend Justification N°2 (generational compromise in front of money creation process)

[Galuel]

If you increase currency levels 5% and prices increase 5%, then each equivalent share has exactly the same commodity value.

So it's not a problem concerning any specific value.

The rich lost in their personal value as measured in loaves of bread.
The poor won in their personal value as measured in loaves of bread.

Rich is not equal to have money. Rich have can have goods, and not money. It's a choice to keep money and not goods.

If you think bread is a specific value very important to estimate your money create a money backed on bread !

I think any specific value as no universal value but human being. I don't care about bread. And if all people buy bread, I will be able to buy something people don't bye, if all the people sell bread, I'll buy at a better price perhaps, if I decide to.

So looking at inflation looking at any specific value in a very strong mistake undestanding economy as a whole thing.

But stipulated. People don't like taxes.

Not only. It's very difficult to recover taxes... People hide what they have. taxes = bad idea in any case.

+ value is not money. Value is all what you own including money which can be a very small part. So speaking about value considering the tool of exchanges that is money is also a mistake.

- Creating money for all is better welcome. All the peole is ok to receive more money,

Again this is a deliberate deception. It still fails on me.

So don't create BitCoins.

but the reachest will probably buy something instead of keeping too much money would COULD lose "value" (relative thing, because of investment could generate new value unexpected next day...).

This is an argument in favor of "price inflation". Since it makes rich people's currency worth less, they will spend it on things that either 1) generate additional currency to make up for the loss or 2) commodities that increase in value as measured by the currency.

Yes, they'll do what they think it's good, what they think "this is value and this is not" and when selling it perhaps the market will say "ok you took a risk, but this is something I don't want to pay what you expect.

Do you know which prices of what will increase or decrease in a growing economy, where tomorow people will buy "XYZ" instead of "ABC" due to innovation ?

I don't know what is value for others, I have no idea at all. I have an Idea of what is value today for me, but even for tomorow I don't know, and without any doubt, not idea at all of what will be for my children.

- Growing (but slow growing) dividend is the only fixed common value we could all be sure, anything else depending of the sum of global work each one will done. It's difficult to generate confidence in a system where ALL the things can change at any moment because of births and deads etc... At least, a little amount of money is sure.

I don't understand this. Can you restate it?

In an innovative economy if money is not dense and stable in space and time confidence cannot developp for investment. In a local part of economy, because of lack of money, investment stop, people try to developp another money system. Not because they don't produce, not because they are "poor", because money is not present, because it has been created only on the past and stocked in another local economy, or it's been created in others parts of the space.

Because money is not universal.

A minimum "flux" of money is necessary if the goal is allowing universality of exchanges elsewhere. Money is not value. It's a tool to exchange it.

IF I increase my own personal productivity and/or the productivity at of others, while at the same time bringing society as a whole additional aggregate and individual value as a direct result of my increased production,...

THEN, there exists NO MORAL REASON for you to take ANY of the value I gained as a result of my productivity invention. In European terms, I would say I have "moral rights" to my creations and to profit from them. Exactly the same moral rights as if I had written a book, or made a sculpture.

You don't think about collective goods, which value depends not of selling it, but to the fact that a lot of people can use it. So those goods inflate rapidly, and give collective value to society (so it's also during time evolution of language, mathematics, science, as collective goods).

This is what you do with all open source systems developped to run internet, and to developp digital economy. You profit for it, and the developpers have received nothing, because they expect a return they don't see.

You should discuss with open source and open content producers about that point.

What you think about money (not inflate it !), they do it with goods (digital value inflate) without a minimum money compensation in the system we live.

Goods inflate, and money should not ? We have a problem of logic here.

[Red]

Thank you Galuel!  The contrast you provided allowed for an epiphany.

The funny thing is, the revelation was that the current central banking mandate is the correct one! :-)
At least from my perspective it is. And I feel confident I can coherently explain why. No conspiracies required. Who'd a thunk!

Maybe I'll start another thread.