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Forum Post: The Issues with a Resource Based (Sound) Economy

Posted 2 years ago on Oct. 5, 2011, 5:59 p.m. EST by iseeamuse (155)
This content is user submitted and not an official statement

There is a lot of discussion about replacing fiat money with a backed currency based on a single resource (ie: gold). The issue with that is the limitations it creates on a growing society. Our society is growing faster and faster every year, and changing our system directly to a finite resource that we have yet to fully quantify will result in as much or more inequity than we have now.

Also, a single-resource value system bring a designed inflexibility to the monetary instrument, and makes it very very prone to sudden change (like the possibility that everyone at once will no longer value precious metals, or postage stamps, or whatever else you base your currency on)

So instead of a fiat currency, or a sound currency, what about something like a trust currency, where the value is based on the sum contribution of all of the members.

If we create a confederated cooperative of local and professional financiers where 1 member has 1 vote on who gets funding for their venture, and the backing for the money is directly based on the needs of the locality or the profession, as decided by the community as a whole.

I admit, the issue of inflation needs to be worked out. Is the money for each individual venture created adding to the pool of some total value, or fracturing it? Is there a way to define a unit of trust? Anyone else want to think creatively?

43 Comments

43 Comments


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[-] 2 points by gawdoftruth (3698) from Santa Barbara, CA 2 years ago

i like thinking creatively, but i think you miss the point of a resource based economy. rather than having currency everything is valued flatly at what it is useful for. Increasingly money is merely a social convention and abstraction. In the future we will stop using the abstraction and use much more exact measures of value.Probably the best work done in this direction is "energy accounting" by the technocrats.

[-] 1 points by moneyandbanking (45) 2 years ago

Can anyone tell me what a "dollar" is? It has no fixed definition. It's value is subject to the whims of the government. I think you know that they like to create and spend money, and redistribute it to their favored interests.

The monetary unit has to have a fixed definition. It never needs to change. In the Colonies people used silver coins minted from various places in the world. Silver coins (about 1 oz) had become popular in Europe (after originally being minted in Joachimsthal, Bohemia around 1519) and were commonly called "Thalers." In the Colonies, this transliterated to "Dollars." Since people were already using these coins, the U.S. adopted -- note, they didn't decree -- the "dollar" as the monetary unit. They actually melted down a bunch of circulated dollar coins and found the average silver content. It was 371.25 grains of pure silver, and that became the definition of the dollar.

Every single paper currency on the planet originated as the name of a fixed weight of silver or gold. Those currencies never could have come into existence if they weren't first based on money that people voluntary used, money that was exchanged in order to establish prices. The government says, here, take these convenient pieces of paper, we will keep your gold safe. Whenever you want it, just come and ask for it. Meanwhile, they create a whole ton of paper tickets that are not legal titles to gold. Then, when people realize what's going on, they say, you can now not get any gold for your paper, and you must turn in all of the gold you have (FDR, 1933). They lie and say it is to save the banking system, help the country, blah blah blah. Then they use the rest of the gold to keep paying foreigners until they can't do it anymore. Then they tell foreigners they can't pay (Nixon, 1971). Then, we have a complete paper fiat money, with "dollars" that have no meaning whatsoever. Then, the whole thing collapses, like every single paper currency in history has done.

Sound money is money that is chosen freely by freely exchanging individuals, not imposed upon people by governments. The original "dollar" was the result of free exchange. Note that the money supply doesn't have to increase to accommodate a growing economy. Prices simply fall over time.

[-] 1 points by iseeamuse (155) 2 years ago

A sound currency does not address the issue of private ownership of natural resources which should not be any single person's right. A trust currency system, if executed properly is not only backed by the people who use it but, created freely and openly with direct accountability, which is one of the main issues with this current system. Inflation would only occur when new ventures are endorsed and admitted into the credit unions. The credit unions being local and professional are democratically run and the size of the economy directly relates to the number of democratically endorsed ventures. Debt is not necessary, and neither is personal profit. In fact in this system, profit and waste are nearly extinguished as societal problems.

[-] 1 points by moneyandbanking (45) 2 years ago

You are free to join voluntarily with others to do whatever you want. Just don't force it up on others.

[-] 1 points by iseeamuse (155) 2 years ago

Pushing corporatism and the current system by doing nothing is forcing it upon others as well. It seems, based on the growing popularity of this movement that I'm not alone in not wanting a corporate model anymore.

[-] 1 points by moneyandbanking (45) 2 years ago

Did you read my post?

[-] 1 points by HankRearden (476) 2 years ago

Good luck with your collectivization plan. Maybe you can be a labor boss on the collective farm.

But be careful. You'll need to do what Stalin did to the farmers in the Ukraine that refused to give up their land. Starve them out. By the millions. Because on the day you try to come take them by force, you will meet resistance, and it might not pan out for you.

Or if you're more peaceful than all that, maybe you can be the Kommissar at your credit union, and lord it over all the other serfs, deciding who gets to do what.

I'll stick to gold and silver, thank you very much. It's a lot easier to trust something someone actually had to work for to produce.

[-] 1 points by iseeamuse (155) 2 years ago

the point is that there aren't bosses. It's a democratic process. All involved are equals and share the power in the decision making process.

[-] 1 points by HankRearden (476) 2 years ago

But I can do a lot of stuff others can't.

I won't do it if fools have any input into decisions on what I do.

I'll pretend to be a fool like everybody else, otherwise they would pile all the hard work on me. And everyone being equal, they would eat the benefits of my work, and keep demanding more. No.

[-] 1 points by iseeamuse (155) 2 years ago

What benefits? If everything you need is already provided for, what more do you want?

[-] 1 points by HankRearden (476) 2 years ago

How can everything I need be already provided for? By who? And who are you to decide what I need?

[-] 1 points by iseeamuse (155) 2 years ago

Who are we to declare that we need more than anyone else? The goals of the founders of this nation, as laid out in various known documents state an egalitarian promise of life, liberty and the pursuit of happiness, which we have no extended to everyone regardless of race, gender, class, religion, ethnicity, etc. If we can meet the basic human needs of every person in society, the only point of a commodities market is entertainment and personal gain. You can still make your own living, but instead of people who know nothing about what you do being in control of your capital you could have a community of like-minded professionals in your craft endorsing the existence of your business. I don't see what's so wrong in this.

[-] 1 points by HankRearden (476) 2 years ago

Nothing wrong with it as long as my property is mine, I keep what I earn, I do what I want, I buy and sell with people only when they agree to do so and so do I. Nobody has any right to a minute of my productive time, unless I promised it to them. And I will never, ever seek to have another man's life crushed under the collective to support me. Anything other than that, you're gonna have to bring a gun.

Edit: and I will never, ever submit to a collective to practice my trades. Never, ever. They can do without me.

[-] 1 points by iseeamuse (155) 2 years ago

Ok, good luck.

[-] 1 points by HankRearden (476) 2 years ago

Thank you, and good luck to you too.

I know you mean well, but I see dead people in your ideas, because compulsion is the only way to make it work, and it never pans out in the long run.

[-] 1 points by iseeamuse (155) 2 years ago

Compulsion will come either way, and more likely from environmental forces than from armed struggle. I am not promoting an immediate change, or even a total disintegration of the corporation, but there needs to be more diversity in the system so that it can last into the future.

[-] 1 points by HankRearden (476) 2 years ago

The environment I can deal with. It's men with guns that present a real problem.

[-] 1 points by iseeamuse (155) 2 years ago

Death comes from many avenues, but it eventually comes to everyone. We need to get beyond ourselves, and see our responsibilities to the future.

[-] 1 points by iseeamuse (155) 2 years ago

now*

[-] 1 points by LibertyFirst (325) 2 years ago

Great post.

[-] 1 points by 666isMONEY (348) 2 years ago

Quotations from famous/wise ppl that believed in eliminating money: http://666ismoney.com/MoneyQuotes.html

[-] 1 points by moneyandbanking (45) 2 years ago

These people were probably not talking about money itself, but rather, money monopolized by the government. Without money, we would have a barter economy, and most of the population of the earth would die. Money is a natural development of free exchange -- it is simply a way to indirectly acquire what you want. It enables monetary calculation. Everything can be priced in terms of money, instead of everything having to have a price in terms of every other good. You can figure out if you are combining resources in a way that creates more value than you put in (profit), or if you are wasting society's scarce resources (loss). This is all very healthy and good. It is when the money becomes monopolized by a government and is turned into money by fiat, money based on debt -- not market money -- that it becomes very dangerous.

[-] 1 points by 666isMONEY (348) 2 years ago

With abundance & modern machienery, barter & hoarding is unnecessary. Half the ppl in the U$A work at unnecessary jobs.

[-] 1 points by quietlike (194) 2 years ago

Think of money as a commodity like any other product. Apply supply/demand fundamentals to it. And consider money as a bartering item. Because what is money? A tool to store value (not found in the US dollar), and to exchange for goods and services. An in-between for money would be Ron Paul's competitve currency idea. Let anything be money, and have the people decide what they want to use. This may sound too unorganized, but it wont take long for people to spend the bad money (obtain real goods) and save the good money, until the bad money is pushed out of circulation, because people dont value it.
This lifts the govt imposition into the market, and is a truly free market idea. People can create their own currency, debase or strengthen it at their own will. But any abuse of this power would pull people away from its usage. The Fed does this, but because of legal tender laws, people have no option to refuse payment in FRNs or to accept anything else as payment (barter). This is ultimately a monopoly on money, and this intervention by govt creates an artificial demand for FRNs, because everyone needs them to conduct commerce.
I urge you to watch this video: Smashing myths and restoring sound money.. The book he recommends is very good "ethics of money production" http://www.youtube.com/watch?v=HAzExlEsIKk

[-] 1 points by LibertyFirst (325) 2 years ago

What you propose is still a fiat system based on debt. This is what we have now--you are just proposing a different set of central planners.

Also, while you are correct that it is possible that suddenly everyone could decide gold has no value, this has not been the case for 5,000 years of human history. We have no other store of value that withstood the test of time. A finite resource such as gold does not limit economic growth. I'm not sure why you feel this is the case. I will take a guess and say that you are supposing that we need an ever-increasing amount of currency to grow. This is not the case. Instead, in a growing economy, each unit of currency is worth more. For example, let's say that a loaf of bread costs 1/1000th of an ounce of gold. We get more efficient and we can now produce bread more quickly and there is much more bread available. What happens is the cost per loaf goes down, to say 1/950th of an ounce of gold. The point of sound money is that it's worth something beyond someone's promise to make good on it. It doesn't have to be gold--gold just has a really good track record of retaining it's value. But it could be anything. The important thing is that there is trust in the system, and in order to foment trust, people need to be assured that the money is worth something more than the paper it's printed on.

Let's say I start my Kingdom of Camelot and issue Camelot dollars. I want you to accept my Camelot Dollars (CDs). You ask, "Why should I?". I show you that I have 1000 cows and that I have issued 1000 CDs, making each CD worht 1 cow. I will keep my cows in the field so you can see them anytime you like and know they are still there. You can bring your CD back to me at any time and exchange it for 1 cow. You still may not believe me, but if everyone says I am trustworthy and you test it out and find that I am, over time my Camelot Dollars will be trusted as a medium of exchange. Of course, the minute I start issuing more CDs without getting more cows to back them up, we have a problem and when you find out that you can no longer exchange your CD for a cow because I don't have enough cows, the system collapses.

Every fiat system, but it's very nature, is subject to debasement and abuse. History has taught us that whomever we put in charge of a fiat system will ultimately abuse it. This is why all fiat systems in history have failed and why we need sound money if we want to prosper.

[-] 1 points by Lifestream (85) from Milan, IL 2 years ago

You misunderstand. In a Resource Based Economy there would be no currency at all, certainly not gold.

[-] 1 points by iseeamuse (155) 2 years ago

Then how do you provide for the necessities? How do you make transactions? Are you proposing a barter system?

[-] 1 points by iseeamuse (155) 2 years ago

Zeitgeist is basically proposing a commons without saying it. How do we value that which exists without necessity?

[-] 2 points by Lifestream (85) from Milan, IL 2 years ago

I don't quite get what you mean by that question. How do we value something we don't need? In a Resource Based Economy people would value peace, sustainability, and abundance, not scarcity and profit. Hence those values would be needs for the system to work, just as scarcity and profit are needed for our current Economic system. And what also what do you mean by commons? Lol.

[-] 1 points by LibertyFirst (325) 2 years ago

How does a resource based economy deal with people who don't value peace, sustainability and abundance? We sure do seem to have a lot of them.

[-] 1 points by Lifestream (85) from Milan, IL 2 years ago

Do you support the OWS? If so, look at what you're advocating for, and a common slogan among the protesters. We are the 99% we don't want to be pushed around anymore by the 1%!...The people who don't value peace sustainability and abundance are the 1%. I hope you get it.

[-] 1 points by LibertyFirst (325) 2 years ago

I would like to support OWS, but I won't if the goal is to force people into a Zeitgeist existence.

Serious question: What do you do with people who don't want to contribute to the collective?

[-] 1 points by Lifestream (85) from Milan, IL 2 years ago

It would only be percieved at forcing if you refuse to let go of your traditional beliefs that an economy that depends on monetary trade in any way is what we should still have. Argue your point that money should still have relevance on the train tracks of society's progress, what with our technological unemployment, and technology in general becoming a greater and greater extension of human performance.

[-] 1 points by LibertyFirst (325) 2 years ago

For argument's sake, let's say I refuse to let go of my traditional beliefs. How are you going to force me to participate in your new system?

[-] 1 points by Lifestream (85) from Milan, IL 2 years ago

There will be no forcing, but slowly and slowly as people realize that a monetary economic system is dated and simply won't serve us any good anymore, you will become the 10%, the 9%, the 8%, the 7%, etc. Knowledge is power, and I, along with anyone in TZM, am trying to give you that power so that we all have the information before us and in our minds to make the best possible decisions as to moving forward into a new paradigm.

[-] 1 points by LibertyFirst (325) 2 years ago

Please don't ascribe the beliefs of the 1% to me. I am not one of them. I am part of the 99%, which is the rest of us. I am trying to point out to you that the system you are proposing requires 100% cooperation, which eliminates freedom of choice. The only way to achieve that is by force. This is generally anathema to peace.

If it doesn't require 100% cooperation of the populace, then why not just go ahead and do it now with a collective of people who also want to live that way? Perhaps I am misunderstanding you, but it seems you are proposing the system Zeitgeist suggests. That system requires global resource management, which means everyone must participate. You don't like our form of government, then you don't eat. Again, doesn't seem very peaceful or respectful of human beings and their rights of self-determination.

What happens in a collective if there are too many poet and not enough farmers? What if the 'extra' poets don't want to be farmers? What do you do with someone who refuses to work? Or who goes to work, but does a really crappy job? What I'm getting at is this: All such systems require the use of force. As an American, I find the idea of forcing people to be part of a collective in direct opposition to my core values, namely, the right of all people to life, liberty and the pursuit of happiness.

[-] 1 points by genanmer (822) 2 years ago

"What I'm getting at is this: All such systems require the use of force."

Not exactly, all systems require some form of work. We have automation and cybernation technologies which could replace 70% of the jobs we require immediately.

The only 'jobs' will be those that require a great deal of education. In a monetary system this would be a disaster because the economy would crash as no one would be able to buy stuff. Plus no one would have access to their necessities. In a Resource Based Economy the people would be freed by this advancement because the remaining occupations would be purely voluntary.

Many jobs exist simply to push around money. As people leave those unnecessary jobs in a RBE they may pursue the hobbies and interests they couldn't before.

So the key to this is implementing technology to free us from the boring and repetitive tasks which are required but no one likes.

Scientific Method > Politics, Money, and opinion

[-] 1 points by Lifestream (85) from Milan, IL 2 years ago

You really don't have any of those values in this current economic system, first you need to realize that. And it's true, it's a difficult concept to grasp let alone accept. But the point is the spreading of knowledge, and the acceptance that, any other economic system involving money simply won't do, and that eliminates a lot of other plausible directions involving reforming ours or going with another ism such as socialism or such else. So, if you have anything better than a Resource Based Economy, do tell me what your plans are? See my point? What else are we left with doing? Before people embrace the fact that we have to do something completely different, true, all other outs will have to be disproved, and I'm all ears for other possibilities.

[-] 1 points by LibertyFirst (325) 2 years ago

The economic system has no bearing on my values. The government and economic system may be trampling my freedoms and ability to pursue my goals, but it has no control over what I value. I also have no problem grasping the concept that TZM is pushing. I am an old fart and have probably been aware of this agenda long before you were. The TZM name is just the latest marketing, but it is a very old idea indeed.
I would suggest that you are taking a giant leap in stating that no economic system involving money will do. I would encourage you to study the history of attempts at both centrally planned societies and free societies. They both have problems--corruption is the biggest one and it permeates all systems. Given a choice, though, I will chose my right to self-determination and the responsibilities that go along with that over having every aspect of my life chosen for me any day.
I like protests and I love the ability to voice my opinion and organize to change things I don't like. I have a feeling that in your society I would not be allowed to do so, because it would be against 'the greater good'.

[-] 1 points by Lifestream (85) from Milan, IL 2 years ago

You wouldn't have the values you do now if they hadn't been taught to you.

[-] 1 points by LibertyFirst (325) 2 years ago

Nor would you have yours. I fail to see your point.

I want to try to understand you ideology, so let me put forth a scenario and a few questions which I hope you will be kind enough to answer.

If we're working within TMZ, then there is a certain number of people that the resources can support. So to ensure we have the correct amount of people, we will need to control population. Assuming we're not just going to shoot the extra people, we need to control reproduction. And if we're going to do that, then it would only make sense that we choose the best 'stock' to reproduce. It would be in the best interest of society to ensure that we have the right mix of thinkers and farmers and so forth to support the collective. So it will be necessary to dictate who can and who cannot reproduce. Probably we should just collect eggs and semen and then sterilize everyone so there is no unauthorized reproduction.

If you do not agree with the above, then please explain to me how you would handle the resource allocation, ensuring there is enough for all, without forced population control.