Zero-Sum Money

Introduction

Money is a system for keeping track of who owes whom a favour. It has traditionally been implemented by trading physical tokens (that symbolise value) for actual goods and services. Today, this system is mostly simulated with computers. All such systems have a fundamental unfairness. At some point, somebody has to create the tokens (real or virtual). Whoever gets to do that receives free wealth. It might be a government or banks or the FED. Whoever has that power effectively has the power of legal counterfeiting. They can print money, i.e. expand the money supply, thus causing inflation and reducing the value of everyone’s money holdings. It is like a covert taxation ability.

In a similar way, the USA receives a gigantic financial leg up over every other country because they coerce others to use the US dollar for buying and selling petroleum.

So my idea is to create an exchange system that does not require the creation of any money. I am not seriously suggesting we should give up classical money. I just want to open up thinking about the possibilities for how commerce might be conducted. The idea was inspired by the way nature can create an electron and positron out of nothing using a quantum fluctuation.

How Does It Work?

A group of people who want to trade with each other set up a computer system where each gets an account with zero dollars in it. Let us say that A cuts a cord of wood and gives it to B. They negotiate between them that this favour is worth $175. A accesses the money computer and asks it to reduce his account by $175 and increase B’s by $175. You might have a little cellphone like device with WiFi/cell tower access to do this, or have the function built into your hand held devices. The sum total of money in the system is still zero.

What is to stop B from collecting favours from everyone in the community and giving nothing back? There needs to be a credit limit, just like ordinary money systems. It needs to be determined by past history and the ability to do favours for others. New members would start out with a very low credit limit, e.g. $50 and it would gradually increase as they did favours for others. You need to make up objective rules for how this limit is gradually expanded/contracted.

Zero-sum money is closer to the way a primitive barter or modern let system works. We have had enough of central powers ripping everyone else off with their centralised control. This is a first cut at an alternative.

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