A Perfect Monetary System - Is it possible?

This question has bothered me for a long, long time. As well as many others. It must be possible but first we’d have to create a system and then figure out how to get it up and running. So, for the sake of a better world let’s exchange some ideas and see what we can come up with. You have nothing to lose.

I’ll get the ball rolling… I’d say just scrap all of the money.

Then we could create a perect transportation system by scrapping all transportation.

What do you expect from a monetary system?

What exactly are the downsides to the current monetary system? What is it that you want to fix with the perfected system?

Anyway, what do you mean by monetary system? Are you talking about monetary policy, which is implemented in our country by the Federal Reserve? Or are you talking about the use of money in general and the fact that a lot of people don’t have any?

You got me :slight_smile:

If one source was saving or taking in money consistently, the money circulating would eventually run out.

Good thing nobody ever does that.

The interaction between the monetary system and the rest of the economy is extremely complicated, and it’s not wise to go changing things without an extremely good reason. Yes, there are problems with the current monetary system, but fixing them will invariably introduce new problems, and you have to have some reason to believe that the new problems will be better or at least not worse than the old ones before you go making the changes.

I will point out that we’ve already tried the no-money system at some point in our history, and we’re not doing it any more. You should probably understand the reasons why before you go advocating that we move back to that state.

What would you replace it with?

Specifically, what is your problem with the current system that you are trying to fix? Is it that the money isn’t backed by anything (like gold or some other fixed substance)? Is it something else? Before your question could be addressed in any way you are going to have to tell use what the problem with the current system is that you are trying to fix…or what your definition of a ‘Perfect Monetary System’ is exactly.

Impossible. If this is the problem you are trying to solve (i.e. that our current monetary system is finite) then you are trying to solve the ‘problem’ of why we have tides, or why the sun rises.


You can’t have a perfect system. You can have a perfectly X system. But having the system be ideal in that attribute will be at the cost of other desired attributes. I guess then the goal is to be either a perfectly balanced system, or an ideal positive feedback system.

Well, I guess I got myself into this mess now… bear with me.
To answer your question, I’d say replace it with nothing.

Everyone MUST have a job. Everyone working would have an ID card, etc, etc, (something bizarre) to prove who they are and if they are employed. If you are not employed for medical reasons there would be people who take care of you. Various tests would be done on you to see if you qualify for this type of treatment.

If you are not working because you are lazy you would be sent to a court and face possible prison time. Since everything you have acquired was free, you will not have access to it just because you want to stop working (unless you possess a “retired” work status). In prison you won’t have access to your owned possessions until you’ve chosen to leave and start work again. If you don’t want to leave so be it.

How would your job be assigned to you? You would be tested. A very complex test (vision, hearing, psychology, physical strength, personal health, math, science, etc) would have to be created. Think of this like an ASVAB test in a sense, but much more complex. Your results would determine jobs you would be suitable for out of what is currently available. Jobs in higher demand would be higher on the list.

I know what you’re thinking… If someone decides to act as a fool (to get an easy job) and get the answers wrong purposely then I guess they will be stuck with a shitty job cleaning sewers or something. That’s up to them. Test retakes would be something like every 2-6 months.

If you wanted to change jobs you could re-take the test, wait for a replacement, then start another job. Should a replacement not show up within say, 30 days, you would be allowed to leave and go to your new job.

If you wanted to be something specific, that you did not qualify for, you’d have to take your case to the court.

Everything would be free to you as long as you are working. If you are not working for medical reasons your friends and family may give you with things if they choose to.

In order to acquire items such as food, gas, toothpaste, etc. (necessities) you will be given a specific limit per day or week. If you had a reason you wanted more of something in this category you would take your case to the court. If what you need may be beneficial in some way/somehow for others and it’s not completely foolish your items may be granted to you.

All other items would be based on waiting lists and would depend on availability. If you wanted a Ferrari, but they are only building 1 per day, and 300 people are on the waiting list for a Ferrari before you, you’d have to wait 300 days for your new Ferrari. So, maybe you’d want to go wait for a Porsche or something first. Or try getting something immediately until then, like a Saab.

In cases where having a vehicle would be necessary for you to get to work, or for a company needing them to continue operation, there would be slight advantages to wait time.
There is much more to this… Sorry it’s vague, but I need to eat something real quick.

I know that economics has a reputation as a vague science, but there are a few things that are well understood, and one of them is that centrally planned economies are fundamentally less efficient than free markets. Under your system, things are guaranteed to get worse on average (some people might be better off, but the misery of others will more than make up for it). History bears the theory out, and it will continue to do so as often as it’s given the opportunity.

Can you explain why? Give me some insight here.

Hopefully this ‘more’ includes a way to accumulate and save value - because currently you have everyone working from paycheck to paycheck. Flood = you be screwed.

Also - no vacations! No sabattacals! No early retirement! No touring europe for a year! If you try, you’ll starve - unless we let people stockpile food or something, but if you allow stuff like that, you’ll have a healthy barter industry in days and makeshift money in months.

Also it sounds like everyone will be working for the state - where will you find jobs for everybody?
You might as well declare that we live like the smurfs - total communism with everyone laboring under the direction of a single fair-minded dictatorial leader. It worked for the ~100 of them; why couldn’t it work for the entire world?

First of all, you might want to read this speech, by Ludwig von Mises, called “Socialism vs. Market Exhange”.

But more generally, in addition to the things he brings up in his speech, one of the functions of the market economy is to exchange information, especially information about demand for products. When I’m willing to buy something from you at a certain price, I’m telling you that that product is worth that certain value to me. And when these transactions are repeated, with multiple people buying and selling an item at a certain price, that helps us learn the demand for it. By knowing the demand, this helps manufacturers of goods figure out how many goods should be made.

But with a command economy,a lot of this information exchange goes away, and your system, which is the strictest command economy I’ve ever seen, it’ll disappear completely. Under your system, how do we figure out how many toothbrushes get made? If they’re only building one Ferrari a day, why? Who’s decided only one Ferrari a day is being built? If there are 300 people who want a Ferrari, why not build 300 Ferraris a day? Or why build any? Who’s the one who decides that labor and raw materials go to build Ferraris rather than computer chips, or apartment buildings?

You’re setting up a system that’s so centralized, it’s unmanageable. No one person or group of people can sit down and get enough information or make all the choices neccesary as big or complicated as the one we have.

Paycheck to paycheck??? There is no paycheck. There is no money… If choose not to work, you are out of the picture. Simple as that. Why would someone who did not want to work be able to just leech off of the rest of people.

Retirement was mentioned in the post above. I guess you didn’t read it. I don’t know an exact date you’d be set to retire, but something around 25 years or so. Your benefits would be the same as when you were working and then some. You would have better advantages than someone who’s been working a month when you’d already worked 25 years.

Vacation time would be just like any other job. Except there can be annual bonuses. Each year you’ve worked for the same company, you may have longer vacation periods. 1 year, 2 weeks. 2 years. 1 month. And so on up til 25. You’d be able to save these as well.

This would have to be world-wide to work out. I’m not only speaking of the U.S.

Jobs will be the same as they are now. Some people may work for the state, some may not. That will depend on your test scores and what you choose to do. Job information will be available from the city/state. Other companies would keep in touch with the state so they are aware of what jobs are available and what the demand is. If you need a job you’d go to a testing facility somewhere in your area. There would be lots of these and not just one office.

This isn’t communism. There is no leader. There is no money. Nothing has a set value. The people would work for the people as one. Everyone would be given an equal chance.

It’s basically what Captain Amazing said. I could’ve sworn that Sam Stone made a very nice post to that effect sometime in the past few months, and I’ve been searching for it, but I’m not able to find it.

It’s really not too far off to think of the market as a massive computer that takes as input everybody’s preferences and computes a set of prices with the right properties, whatever those are. In order to duplicate that in a centralized economy, you need both a computer that can do those sorts of calculations in real time, and a method of getting sufficient information about everyone’s preferences also in real time. The first isn’t too bad, but the second isn’t realistically possible. So yes, you will be making less use of the available information than the market does, and that’s not going to enable you to make better decisions.

Well, I haven’t gotten into how a business would be started yet. How many products would be built? This will depend. Before a new company is created the people would make a vote as to it being created and operated or not. During this voting should a large interest be taken in the business they would be able to calculate what kind of demand for this business there would be. If it’s going to be a state-wide business, there would be less votes required before coming to a decision, a larger business would require more people. For any business to be started you’d be looking at about 95% positive outlook from the voters. If the business slowly dwindles down over time then employees could find a new job to do.

Picture a beehive as the world. Each of these little holes in the hive would represent a state and it’s borders. Within each state there will be several locations which house a court, voting stations, a job board, testing facility, etc. All of these locations would be linked globally. If you wanted to work in a different part of the world you could easily have access to job information from that part of the world.

Just to pick a single point - you can expand this to all of your other points.

People aren’t motivated by the same thing. Some want to work extremely hard, use 2 weeks of vacation a year and get paid more money. Others want to work hard for a year and then take 3 months off to travel. Some jobs are seasonal and attract people who want that lifestyle. Our current system allows people to decide themselves what is best for them.

Under your system, what does the person who wants to work a few years saving up money and living frugally, and then backpack in Europe for a year supposed to do? What does the business owner (or are they eliminated from your system) who wants to work hard with no vacations for 20 years to build up a business that they can leave to their family, then retire at 50 to Florida and play golf do?

What makes you think that you or any group of people knows what is the best and only way to make a life?

BTW, your proposal has little to do with the monetary system but is about our entire economy. You’re advocating pure communism.

10 years ago, who would have voted to create an iPod? Do you think people have a clue what is going to be useful 10 years from now? People already vote on what is useful now; they can choose to buy it or not. You’re turning an efficient system (with many built in inefficiencies) into a system designed to stifle any innovation. Who comes up with the idea to build a new product? What is their incentive to do so.

Look for some older threads with posts by Olentzero. There’s many of them, with lots of good arguments for why planned economies are hopelessly inefficient.

Yes, it is communism. It’s incredibly pure (read: unworkable in reality) communism.

Communism =/= dictatorship (or monarchy or democracy or theocracy). Communism is an economic structure, not a political one.

Their paycheck is their food and water and housing and gasoline and and what luxuries you dole out to them. They stop working they stop eating, you chuck them out, and they die within a week. Right? If that’s not living from paycheck to paycheck, nothing is.

So, like I said, no early retirement then. (Did you read my post.)

Okay, I’ll concede the vacations - that hardly saves your proposal.

Obviously - otherwise your people will start trading in some other county’s currency.

Without money, companies left to themselves would fold isntantly - they’d have no way to track accumulated value for created and distributed products, and they’d have no way to establish an exchange for the goods and supplies necessary to make their products and run their business. Literally everything, at every stage of the production process from renting an office to building a factory to procuring steel to buying paperclips would be wholly run by the government - and, of course, everybody from the janitor to the CEO will be looking to the government for their ‘paycheck’ - they’ll report their labor to the government, and get their weeekly allocation of food and housing vouchers and ferraris in return.

How you can even imagine this as anything other than a total government takeover is a mystery to me.

No leader? No leader? If there’s no leader who decides what happens, what gets made, who gets paid? You are describing a dictatorial autocracy by whatever person or persons or supercomputers or all-powerful dieties or red-capped bearded blue men are giving the orders and handing out the goodies, and let’s not even pretend otherwise.