Kaylee
Member
Well... Glock glocker and I were talking, and the subject of economic systems came up. After chatting a bit, he wanted to see what the rest of y'all thought, given that you're all so smart and everything. 
So... blue sky perfect world -- if you were to design an economic model from scratch BUT take into account human and organizational nature.... what would you do?
Me... I'd take a page from L Niel Smith and keep units of account in precious metals... because I believe SOME kind of commodity standard is necessary to keep the money issuers honest. Gold and silver worked well for thousands of years, no reason they still couldn't. The primary change of course would be to no longer say 1 dollar=1/20 oz, 1 pound = 1/4 oz, and so forth, but instead actually do commerce in grain weights of metals. An ounce is an ounce is an ounce, period.. there's no national currency to be devalued, debased, or inflated.
For example.. you walk into a restaurant, pay a couple ounces silver, or say 1/10 oz gold or something. No dollars, dinars, francs, euros, or whatever else. Hard definable quantity.. it is what it is.
The system would of course have some flaws (mostly due to currency shocks as population changes and metal supply stays constant, or vice versa, or the two move against each other). Still and all, it's the most human-tamper proof system I know if until someone finds a way to economically make gold, so it seems good to me.
However, you'd still need a consortium of banking entities to handle the flows of commerce -- capitalism doesn't happen without providers of capital. Moreover, there need to be SOME rules of the game -- total lawlessness doesn't provide enough stability for business owners to be able to project far enough into the future to take the risk on borrowed capital. Here, I think a private banking system, akin to the late 19th century commercial bankers and Bank of England, would be ideal. Let them also have boards of standards, such that any bank loaning out too much against its reserves and the like gets smacked down... otherwise, you see bank runs during hard times. We'd have to be willing to see "sickeningly wealthy" bankers again though, and I dunno if the populace at large is comfy with that.
Of course, most of the reserves would be handled as just that -- reserves. I'd imagine most of the actual flow would be no different than it is today -- predominantly electronic, albeit instantly redeemable at any (private) bank. Perhaps in exchange for a nominal seignorage fee on taking delivery of the physical stuff. Otherwise, not too different than what, say, e-gold is doing today.
Thoughts? Better ideas?
So... blue sky perfect world -- if you were to design an economic model from scratch BUT take into account human and organizational nature.... what would you do? Me... I'd take a page from L Niel Smith and keep units of account in precious metals... because I believe SOME kind of commodity standard is necessary to keep the money issuers honest. Gold and silver worked well for thousands of years, no reason they still couldn't. The primary change of course would be to no longer say 1 dollar=1/20 oz, 1 pound = 1/4 oz, and so forth, but instead actually do commerce in grain weights of metals. An ounce is an ounce is an ounce, period.. there's no national currency to be devalued, debased, or inflated.
For example.. you walk into a restaurant, pay a couple ounces silver, or say 1/10 oz gold or something. No dollars, dinars, francs, euros, or whatever else. Hard definable quantity.. it is what it is.
The system would of course have some flaws (mostly due to currency shocks as population changes and metal supply stays constant, or vice versa, or the two move against each other). Still and all, it's the most human-tamper proof system I know if until someone finds a way to economically make gold, so it seems good to me.
However, you'd still need a consortium of banking entities to handle the flows of commerce -- capitalism doesn't happen without providers of capital. Moreover, there need to be SOME rules of the game -- total lawlessness doesn't provide enough stability for business owners to be able to project far enough into the future to take the risk on borrowed capital. Here, I think a private banking system, akin to the late 19th century commercial bankers and Bank of England, would be ideal. Let them also have boards of standards, such that any bank loaning out too much against its reserves and the like gets smacked down... otherwise, you see bank runs during hard times. We'd have to be willing to see "sickeningly wealthy" bankers again though, and I dunno if the populace at large is comfy with that.
Of course, most of the reserves would be handled as just that -- reserves. I'd imagine most of the actual flow would be no different than it is today -- predominantly electronic, albeit instantly redeemable at any (private) bank. Perhaps in exchange for a nominal seignorage fee on taking delivery of the physical stuff. Otherwise, not too different than what, say, e-gold is doing today.
Thoughts? Better ideas?
