I've discussed the concept of money here before, but one aspect of money I've given some thought to lately is the concept of "fiat currency".
Fiat currency is any currency that doesn't have a fixed metric of independent valuation. The refined metal gold has long been regarded as a desirable basis for such a metric. For so long, in fact, that the metal itself has become synonymous with the concept of currency/money. This despite the well documented short-comings historically associated with using the metal in that capacity.
I'm going to suggest that there exists a more universal, less tamperable metric available.
A single molecule of hydrogen can be theoretically converted into a known quantity of energy. That energy release can be quantified in units of electrical energy. A given nations ability to generate electrical energy is also quantifiable. By pegging a given currency at some arbitrary unit of electrical energy, and quantifying the issuing country's total electrical generation capacity in the same unit of measure, it becomes a fairly straight-forward calculation to valuate any currency in relation to a fixed metric as well as relative to any other currency.
The notion of fiat currency disappears into the mists of history, and economics takes a serious step into the realms of science.
Where this becomes acutely urgent is the day Elon Musk's Mars colony begins to issue its own currency (which will be necessary in order for the colonists to develop and utilize the local economy that assuredly will develop right along with the colony itself). Any Earth currency could be used, of course, if the colonists wished to have their lives and fortunes held hostage to someone else's political quirks and whims.
Can we all agree on the unlikeliness of this being accepted for very long based on humanity's history of colonization?
Changing to such a valuation system will be disruptive in ways large and small (any wagers being offered on how few countries currency will prove not to have been fraudulently manipulated by its own government?), but for the human species to be able to successfully migrate off of the planet and into the solar system, we must have a currency valuation metric in place that applies equally reliably (not to mention transparently) throughout the solar system. Having such an inflationary resistant system in place would greatly increase the viability of concepts like Universal Basic Income and multi-century financial planning for only two other examples.
We're going to have to do this (or something indistinguishably like it) at some point, so why not do it via talk-talk now, rather than by some future strongman regime the way Germany's economic (and basically every other) system got imposed upon it post-WW II?
Thursday, July 27, 2017
Wednesday, July 26, 2017
Considering The Proposition: How Jeff Bezos Can Hire Humanity
Since first submitting How Jeff Bezos Can Hire Humanity for consideration as a contribution to the book Visions for a World Transformed, I have had further thoughts I would like to add.
The first of those being that the published concept isn't a stand-alone. While Jeff Bezos likely could finance such a thing, and build a profitable company therefrom, the idea makes better sense as a principal component of a larger, more mutually supportive structure.
Secondly, the idea of Universal Basic Income itself makes better sense as a profit-making venture rather than as a purely tax funded endeavor. As I have already given previous attention to the first part, here follows some thoughts on the second.
UBI is by no means a new idea. The one change from all previous efforts I would insist upon is that UBI be primarily a mechanism for funding a national health insurance system for US citizens (if you don't live in the US, please feel free to initiate an identical program in the country you are a citizen of). To this end, all current financial support mechanisms currently available to some citizens, some of the time, is re-directed to funding issuance of One (1) Primary Share of UBI to every United States citizen (and ONLY US citizens as that condition is legislatively defined in [entirely arbitrary date of] the year 2000). This share entitles the citizen to unlimited health care for the citizen's lifetime, and has a per share face value of US $12,000.00. Each Primary Share is paid by the US government in lieu of any other financial benefits or payments that a citizen might previously have become eligible for (Social Security principally, but ALL other financial supports are explicitly included) Said Primary Share of UBI has a lifetime equal to that of the citizen who owns it. When the citizen expires, the share value escheats to the general UBI fund. When a new citizen is born, the US government issues him/her a UBI Primary Share. When a new citizen is otherwise created, part of the citizenship process is purchase (at face value, though there ought to be a mechanism whereby such share may be granted in whole or part) of a Primary Share of UBI. In addition to Social Security, all US military pensions of every description will be replaced by UBI shares.
For the sake of example; stipulate there are 300 million US citizens and each year 15% of them spend US $10 million on health care. 45 million x US $10 million = US$450 million that UBI total investments have to generate in order to cover this expense. Assuming 300 million citizens individually own an average 200 total UBI shares, and an annual 2.5% return on share investment of US $50 billion, I think we can afford not to exclude ... well, pretty much anything anyone wants health care-wise.
Additionally, there will be created as part of the UBI development and implementation process the category of Supplemental Share of UBI. Each Supplemental Share has a face value of US $1,000.00. Any monies a citizen might have become eligible for previously to the creation of UBI, and not applied to purchase of the Primary Share, is applied to the purchase of Supplemental Shares. Unlike Primary shares (which apply only to paying US citizen's health care treatment), Supplemental Shares are a means of earning income. Sales of Supplemental Shares are open to any investor from anywhere on - or off (looking right at you Elon Musk) - the planet, and are the permanent property of the purchaser, who may dispose of them when and as s/he likes. Supplemental Shares pay an annual dividend (on a to-be-determined schedule) of 1.5% of the face value. Citizens (or anyone really) are encouraged to invest in Supplemental Shares as extensively and often as they are able to. These initial "calculations" only apply to existing citizens at the time of UBI initiation, so a mechanism whereby parents of new citizens may affordably build a Supplemental Share fund for their children during their legal minority years will have to be considered and included in the UBI development process.
For the sake of example; stipulate that the "average" annual Social Security payment is US $20,000.00 and that the "average" period of claim is 25 years (age 65 to 90). The sum is US $500,000.00. Minus the Primary Share value of US $12,000.00 and the "average" now-living US citizen receives 488 Supplemental Shares of UBI. US $15.00 x 488 = an annual payment of US $ 7,320.00. Add to that initial purchase any other financial payments a citizen might be eligible for, and it will likely still be necessary to create an age-related discount for those between the stipulated ages at the time of UBI creation (although a mechanism to include private pension funds into Supplemental Share purchases would also prove useful I suggest - a tax reduction inducement to private pension fund providers to apply the actuarial total of expected pension payments in full at the time of UBI creation might prove helpful as well).
For UBI to be a profit-making venture (which it must be to pay dividends), the initial investment of UBI funds will be applied to the establishment of a US national electrical generating capacity of 5 terra-watts (in excess of the national generating capacity in the year 2010). The only means of doing so at this point in human history is by means of nuclear power plants (which are always subject to replacement with fusion power plants should that technology prove out as a stable power source). To permit quick development of this strategy, the President of the United States, in the capacity of Commander-in-Chief of the US Armed Forces, will direct that these power plants will be constructed to a pre-determined design of 1,000 KWe on all existing US military reservations within the United States (to include all US territories) as a matter of National Security. Existing electrical power distribution business entities will be invited to bid on distribution of this energy at such a price per kilowatt as will exceed the forecast UBI funding requirements. Additionally, construction of a sufficient number of nuclear plants that burn "spent" nuclear fuel will also be directed as part of the power plant project (the subsequent unburnt fuel having a half-life measured in a few hundred years instead of thousands).
Additional UBI investment possibilities seem certain, but unnecessary to this presentation.
Further refinements of both the employment and the UBI parts of this strategy need to be considered, but the basics of the concept are in place. The Bezos Planetary Employment Office, working with the UBI Fund management, ensures all humans (assuming successful replication of the UBI model planet-wide - initially throughout the United States) with the means of attaining an education, applying for a job (or funding for a self-employment circumstance), training for future occupational opportunities, managing personal finance (to include UBI share management), personal health care (explicitly to include Healthy Life Extension technologies and therapies), and no doubt as many other applications as will seem likely to make the Agency shareholders (many - even most eventually - of whom take the form of UBI share investments) a regular financial profit.
The first of those being that the published concept isn't a stand-alone. While Jeff Bezos likely could finance such a thing, and build a profitable company therefrom, the idea makes better sense as a principal component of a larger, more mutually supportive structure.
Secondly, the idea of Universal Basic Income itself makes better sense as a profit-making venture rather than as a purely tax funded endeavor. As I have already given previous attention to the first part, here follows some thoughts on the second.
UBI is by no means a new idea. The one change from all previous efforts I would insist upon is that UBI be primarily a mechanism for funding a national health insurance system for US citizens (if you don't live in the US, please feel free to initiate an identical program in the country you are a citizen of). To this end, all current financial support mechanisms currently available to some citizens, some of the time, is re-directed to funding issuance of One (1) Primary Share of UBI to every United States citizen (and ONLY US citizens as that condition is legislatively defined in [entirely arbitrary date of] the year 2000). This share entitles the citizen to unlimited health care for the citizen's lifetime, and has a per share face value of US $12,000.00. Each Primary Share is paid by the US government in lieu of any other financial benefits or payments that a citizen might previously have become eligible for (Social Security principally, but ALL other financial supports are explicitly included) Said Primary Share of UBI has a lifetime equal to that of the citizen who owns it. When the citizen expires, the share value escheats to the general UBI fund. When a new citizen is born, the US government issues him/her a UBI Primary Share. When a new citizen is otherwise created, part of the citizenship process is purchase (at face value, though there ought to be a mechanism whereby such share may be granted in whole or part) of a Primary Share of UBI. In addition to Social Security, all US military pensions of every description will be replaced by UBI shares.
For the sake of example; stipulate there are 300 million US citizens and each year 15% of them spend US $10 million on health care. 45 million x US $10 million = US$450 million that UBI total investments have to generate in order to cover this expense. Assuming 300 million citizens individually own an average 200 total UBI shares, and an annual 2.5% return on share investment of US $50 billion, I think we can afford not to exclude ... well, pretty much anything anyone wants health care-wise.
Additionally, there will be created as part of the UBI development and implementation process the category of Supplemental Share of UBI. Each Supplemental Share has a face value of US $1,000.00. Any monies a citizen might have become eligible for previously to the creation of UBI, and not applied to purchase of the Primary Share, is applied to the purchase of Supplemental Shares. Unlike Primary shares (which apply only to paying US citizen's health care treatment), Supplemental Shares are a means of earning income. Sales of Supplemental Shares are open to any investor from anywhere on - or off (looking right at you Elon Musk) - the planet, and are the permanent property of the purchaser, who may dispose of them when and as s/he likes. Supplemental Shares pay an annual dividend (on a to-be-determined schedule) of 1.5% of the face value. Citizens (or anyone really) are encouraged to invest in Supplemental Shares as extensively and often as they are able to. These initial "calculations" only apply to existing citizens at the time of UBI initiation, so a mechanism whereby parents of new citizens may affordably build a Supplemental Share fund for their children during their legal minority years will have to be considered and included in the UBI development process.
For the sake of example; stipulate that the "average" annual Social Security payment is US $20,000.00 and that the "average" period of claim is 25 years (age 65 to 90). The sum is US $500,000.00. Minus the Primary Share value of US $12,000.00 and the "average" now-living US citizen receives 488 Supplemental Shares of UBI. US $15.00 x 488 = an annual payment of US $ 7,320.00. Add to that initial purchase any other financial payments a citizen might be eligible for, and it will likely still be necessary to create an age-related discount for those between the stipulated ages at the time of UBI creation (although a mechanism to include private pension funds into Supplemental Share purchases would also prove useful I suggest - a tax reduction inducement to private pension fund providers to apply the actuarial total of expected pension payments in full at the time of UBI creation might prove helpful as well).
For UBI to be a profit-making venture (which it must be to pay dividends), the initial investment of UBI funds will be applied to the establishment of a US national electrical generating capacity of 5 terra-watts (in excess of the national generating capacity in the year 2010). The only means of doing so at this point in human history is by means of nuclear power plants (which are always subject to replacement with fusion power plants should that technology prove out as a stable power source). To permit quick development of this strategy, the President of the United States, in the capacity of Commander-in-Chief of the US Armed Forces, will direct that these power plants will be constructed to a pre-determined design of 1,000 KWe on all existing US military reservations within the United States (to include all US territories) as a matter of National Security. Existing electrical power distribution business entities will be invited to bid on distribution of this energy at such a price per kilowatt as will exceed the forecast UBI funding requirements. Additionally, construction of a sufficient number of nuclear plants that burn "spent" nuclear fuel will also be directed as part of the power plant project (the subsequent unburnt fuel having a half-life measured in a few hundred years instead of thousands).
Additional UBI investment possibilities seem certain, but unnecessary to this presentation.
Further refinements of both the employment and the UBI parts of this strategy need to be considered, but the basics of the concept are in place. The Bezos Planetary Employment Office, working with the UBI Fund management, ensures all humans (assuming successful replication of the UBI model planet-wide - initially throughout the United States) with the means of attaining an education, applying for a job (or funding for a self-employment circumstance), training for future occupational opportunities, managing personal finance (to include UBI share management), personal health care (explicitly to include Healthy Life Extension technologies and therapies), and no doubt as many other applications as will seem likely to make the Agency shareholders (many - even most eventually - of whom take the form of UBI share investments) a regular financial profit.
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