mindstalk | So what's the attraction of moneyless economies?

The problem with money is that it's an easy to way turn IOUs and other forms of delayed payment into a winnable game - via credit, interest, loans, and suchlike. I'm strongly opposed to the existence of that particular game and would love an alternative, and eliminating money is a good way to accomplish this. Of course, your points are also well made, which means that coming up with a non-monetary economic system is far from easy.

This is why, while I've veered sharply leftwards, my version manifests as land taxes, eco taxes, progressive income taxes, and basic income or guaranteed job opportunities. Ensure income, or access to capital; put some headwind against the ability to accumulate money just by having money; but keep the time-test system of private choice in competitive markets, outside areas where those may not work so well (like health care or fire departments.)

Edited Date: 2009-03-01 09:44 (UTC)

*nods* My ideal is getting rid of money - my practical idea is to have all necessities and essential services state-run: healthcare, emergency services, education, phone & internet access, as well as all forms of insurance (I find the very concept of for-profit insurance to be completely foolish). Combine that with a guaranteed minimum income and market driven non-essentials and I think you can have a reasonably far and equitable society.

Combine that with a guaranteed minimum income and market driven non-essentials and I think you can have a reasonably far and equitable society.

But those "market-driven non-essentials" will be purchased through trade, and when you have trade a medium of exchange naturally develops. Abolish "money," and something else, near-universally valued (and hence universally-valued for trading purposes) takes its place.

In World War II prison camps it was cigarettes. What about non-smokers? They simply traded their cigarette rations for other goods and services.

Furthermore, you are ignoring technological progress. Would any modern First Worlder be happy with a 3000 BC Sumerian concept of "necessities?" Then what makes you think that the very concept of "necessities" remains stable.

Also, state-run production tends to be far less efficient than private production, so unless you set your "necessities" level so relatively low as to be produced by only a tiny part of the economy, you are choking your "means of production."

But those "market-driven non-essentials" will be purchased through trade, and when you have trade a medium of exchange naturally develops. Abolish "money," and something else, near-universally valued (and hence universally-valued for trading purposes) takes its place.

I completely agree, my point about this more practical alternative (which I didn't explain particular well) was that it would involve money.

Furthermore, you are ignoring technological progress. Would any modern First Worlder be happy with a 3000 BC Sumerian concept of "necessities?" Then what makes you think that the very concept of "necessities" remains stable.

And thus, as technology changes, the necessities provided by the government change - that's one of the advantages of elected government - response to changing citizen demands & priorities.

Also, state-run production tends to be far less efficient than private production, so unless you set your "necessities" level so relatively low as to be produced by only a tiny part of the economy, you are choking your "means of production."

In general, having the government produce consumer goods isn't all that efficient. However, it's equally clear that government administered & provided services (and especially essential services) often work vastly better than any private alternatives. Medical care is only the most obvious example, with medical costs in nations with government administered healthcare having on average half the per capita costs of those in nations like the US.

From my PoV, if you want a equitable (but not IMHO ideal) form of political economy, you buy your media players, shirts, shoes, cars, washing machines, and other consumer and durable goods from private for-profit manufacturers (which are regulated to prevent monopolies and to guarantee product safety, but are otherwise allowed to do as they will), but obtain essential services from the government

And your food, in the diversity and particularness that you want it, from private sources, even though food is essential.

Agreed, which is one of the reasons for also including a guaranteed minimum income.

The utility of social safety nets is my main disagreement with pure laissez-faire economics. This utiltiy exists even for those who do not use the safety nets, since it reduces their own fear of death through poverty, and consequently improves their enjoyment of life.

Great care must however be taken to keep the cost of the social safety nets, both in financial and behavior-distortion terms, fairly small. Otherwise, you can crash not only your economy but also your culture. I point to modern Britain as a good example of such a catastrophe.

The problem with money is that it's an easy to way turn IOUs and other forms of delayed payment into a winnable game - via credit, interest, loans, and suchlike. I'm strongly opposed to the existence of that particular game ...

Why? The reason for "credit, interest, loans and suchlike" is that present-goods are worth more than future-goods, hence if someone wants more goods than they have now, they must pay rent on the goods they hire. This is true whether or not the goods are in the form of money, ingots of metal, cattle, grain, robots or micrograms of antimatter.

The renting of goods is vital to capital formation, which is in turn vital to economic adaptation and growth. Thus this renting is a valuable service, for which the creditors quite reasonably expect to be compensated. Fail to compensate them, and goods will no longer be available for rent, with all that this implies.

Of course, your points are also well made, which means that coming up with a non-monetary economic system is far from easy.

One can change the specific medium of exchange -- it was once grain, then precious metals, now abstract claims of good, and I suspect that it will eventually be claims on usable energy. But the need for a medium of exchange remains, because without it all one can do is barter.

I think part of the issue with money is that it seems like an unnecessary complication. See Sturgeon's Cosmic Rape/ Meeting with Medusa. When the human race becomes telepathic, money disappears, and there's an explanation that anything which could disappear so easily was never real in the first place.

As for money and status, it's true that money can be used to make more money, but money can also break up stable patterns of dominance. If you have your own money, it's better than being dependent on someone who can decide in detail about what you're allowed to have.

When the human race becomes telepathic, money disappears, and there's an explanation that anything which could disappear so easily was never real in the first place.

Ah, but consider what we are learning about how the brain operates in the first place. Neural patterns compete for available food and computing resources. All that happens in a telepathic massmind is that the medium of exchange has changed -- that's no more an abolition of money than was the shift from grain to ingots of precious metal, from metal to coins, or from coins to paper.

As for money and status, it's true that money can be used to make more money, but money can also break up stable patterns of dominance. If you have your own money, it's better than being dependent on someone who can decide in detail about what you're allowed to have.

(*nods*) Capitalism is thus the enemy of entrenched privilege, because money doesn't care about the social standing of the owner.

Though capitalism and property ownership can as easily be tools of entrench privilege, e.g. the reductio case where one person owns everything, or my abstract model where equals with equal goods play poker, which will random walk until one person owns everything.

Though capitalism and property ownership can as easily be tools of entrench privilege ...

Particularly if the current set of property-owners can pass laws protecting themselves from future competitors.

... e.g. the reductio case where one person owns everything ...

Though it's difficult to see how this is possible, assuming that any of the other people participating in the economy are capable of productive labor.

... or my abstract model where equals with equal goods play poker, which will random walk until one person owns everything.

Of course, poker is a zero-sum game. Economics is normally a positive-sum game, and that makes a very big difference.

own "everything" -- specifically all land, with everyone else having to pay rent to the one landlord. Within the limits of voluntary exchange, I don't see why the landlord would have any incentive to sell land.

Fair point about zero-sumness -- though the land market probably is close to zero sum, outside of reclamation efforts. But one can lose wealth too. So imagine a game with random positive and negative moves, with the average of the available moves being positive. Seem a closer model? (All moves in the model are random not because all real outcomes are imagined to be random, but because the model assumed equal capabilities, so non-random moves cancel out, as it were. Real random 'moves' being weather, cancer, which of N well-designed products wins a certain market (e.g. Rowling's success))

Here the trend would be upward, but you'd still have a real chance of random walking to the zero point of starvation/bankruptcy/forced risk-return aversion, so I think there'd still be a long-term concentration of wealth effect from random walks, even if everyone were of equal merit.

... own "everything" -- specifically all land, with everyone else having to pay rent to the one landlord. Within the limits of voluntary exchange, I don't see why the landlord would have any incentive to sell land.

This would be theoretically plausible given a small area (city-state or less) or a very large minimum lot transfer size, and a very stationary population (not much in the way of migration in either direction, or size change). Some islands, and some medieval polities, might approximate this situation.

One barrier to its attainment would be that, as the biggest landowner got more and more land, the price of the remaining land would go up, making it harder and harder for him to acquire the remaining land. The other landowners will sell him first the land they require least, and will demand higher and higher prices for each additional unit of their remaining land.

Historically, of course, the tendency has been for large land acquisitions to be by some form of involuntary exchange, and the trend aftrerward toward the large landowner selling off the land. The classic example of this is the Norman Conquest, which resulted in very large landholdings which were sold off piece by piece over subsequent centuries -- to the point where obligitory primogeniture was invented and imposed largely to check tihs trend.

The reason for this also relates to marginal utility. For the Baron of Whereverset, who owns 10,000 acres of land, selling 100 acres of land to get better armament reduces his status and wealth as a landholder very slightly; and he can use those arms and armor on the battlefield better than he can use the 100 acres. For Richie Commons, who buys the land, that 100 acres makes him landed gentry, and he had a lot of money to spend anyway.

You can get a trend back toward concentration when technological change increases the value of land held in large blocs. One classic example of this, also from English history, is the tendency toward "enclosures," as improved farming techniques rendered large landholdings more efficient than smaller ones. This relates mostly toward agricultural and pastoral lands, however, though it could be applied to very valuable real estate such as in a city core, where a big lot can house a skyscraper while a smaller one can house only a small tenament.

Now, assuming that you get to the "ultimate monopoly" position where only one person owns all the land, I'm guessing that the reason that person never sells is that he can get more money whenever he likes by simply increasing the rent. This only works, however, if there is literally nowhere else to go. If there are other places in the world, he will reach a point of diminishing and then negative returns, as his rent increases simply induce his tenants to emigrate.

It is true that, in the future, it will become more and more practical for a landowner to own land all over the Earth, thus raising the spectre of a "land monopolist" owning the whole Earth. However, over that long a stretch of time, "the whole Earth" will no longer be all the land there is, anyway.

Yeah, I was thinking of a state where someone starts out with all (and 'most' is often good enough) the land, never mind how. As for increasing rents, sure, increasing them arbitrarily may not work, but it is a monopoly and guaranteed income. so there's little incentive for a sane monopolist to sell land, or sell much land.

Why would the Baron need -- or want -- to sell any land? He collects plenty of rent, and, as population rises, and, as you correctly note, as technology progresses, rent rises. All goes into his pocket. (In his sleep, the classical economists pointed out.)

And how did Richie Commons ever come up with lots of money? The Baron's ability to collect in rent the lion's share of the social surplus may leave us in a position where only the J. K. Rowlings of the world will have lots of money without owning our land and our natural resources.

It costs a great deal to move to another country, and so far there are few countries where policies are designed to make land cheap or free (that is, where one doesn't pay the former owner large sums for value he didn't create -- but instead pays the commons annually for the privilege of having secure title to the site for as long as one uses it.)

How many years of ("by choice") immigrants' labor have American landholders received by paying their passage across the Atlantic? (Put aside the labor of those who didn't come by choice.)

You might explore http://www.wealthandwant.com/ and http://lvtfan.typepad.com

Why would the Baron need -- or want -- to sell any land? He collects plenty of rent, and, as population rises, and, as you correctly note, as technology progresses, rent rises. All goes into his pocket. (In his sleep, the classical economists pointed out.)

Well, in the actual medieval environment, the Baron wanted to sell some of his land because he only had a local monopoly on land, and hence could not raise his rents as high as needed to meet any and all expenses, even ignoring the fact that the Baron faced both legal and extra-legal obstacles to rent-racking. And in a given year, he might need more cash than he could get from his rents in that year.

Suppose that the Baron is able to raise his rents without either being stopped by the courts (England was a society under law to a degree remarkable in the period, and raising his rents would violate his existing contracts with the tenants) or by an uprising. Past a point, his free tenants would start to leave (which was perfectly legal) -- past another point, his serfs would start to leave (illegal, but very difficult to prevent if they were determined).

His obvious solutions to the cash shortage problem were a loan secured by land, or the direct sale of land. Both faced legal obstacles in the medieval period, but both also had ways around the obstacles. And both were engaged in, repeatedly, when people like the Baron needed money.

And how did Richie Commons ever come up with lots of money?

Richie Commons was usually a greater merchant, though he might also be a very skilled artisan. I never said that the only economic activities in medieval England were farming and herding -- and they weren't.

The Baron's ability to collect in rent the lion's share of the social surplus may leave us in a position where only the J. K. Rowlings of the world will have lots of money without owning our land and our natural resources.

It didn't historically, in a much less liberal political system -- why should it now?

But if you want to see the darker path in history, look at 16th-18th century Eastern Europe, where the big landowners were able to reduce the population to serfdom. This was done with a lot of force, though, and at the cost of choking off the towns. And this eventually led to the hideous massacres of Communism and Naziism, when modernity finally caught up with the landowners.

It costs a great deal to move to another country, and so far there are few countries where policies are designed to make land cheap or free ...

It does not have to be "cheap" or "free" by your standards. Merely cheaper than that of the rent-raising Baron.

To put it another way, landowners compete with one another for tenants, just as tenants compete with one another for tenancies. If one raises one's rents too high above the market norm, one finds it difficult to gain or keep tenants.

This is true even if it's illegal for tenants to leave, as was the case in the system of serfdom. They eventually leave anyway, law or no law.

... (that is, where one doesn't pay the former owner large sums for value he didn't create -- but instead pays the commons annually for the privilege of having secure title to the site for as long as one uses it.) ...

It's not surprising that few countries engage in the mass plundering of their landowners' assets. Countries which do things like that usually tend to plunder other things as well, creating very unstable economies, investor flight, and vicious-cycle spirals into mass poverty. See "Cuba" and "North Korea" for good examples.

How many years of ("by choice") immigrants' labor have American landholders received by paying their passage across the Atlantic?

Not sure what you mean by that -- are you talking about the system of indentured servitude which existed in the 17th-18th centuries? And why is "by choice" in quotes? Most indentured servants did choose to sign the articles, though some were of course kidnapped.

Anyway, the actual history of England proves my points. And it proved them under less-than-ideal conditions, with the landowners having more than equal power and access to the law.

See "Hong Kong" for a counter-example. And "Adam Smith" for theoretical support.

Fair point about zero-sumness -- though the land market probably is close to zero sum, outside of reclamation efforts.

You can however improve land. Consider the value of land as unimproved park, with a house on it, with an apartment building, and with a skyscraper. You can also go forth and claim new lands, across wider and wider areas as technology increases and costs of access and exploitation decrease.

Here the trend would be upward, but you'd still have a real chance of random walking to the zero point of starvation/bankruptcy/forced risk-return aversion, so I think there'd still be a long-term concentration of wealth effect from random walks, even if everyone were of equal merit.

This would be true if the actors are immortal and nobody new is ever "born" into the game. This is a good argument for social safety nets, however, especially as lifespans increase and birthrates decrease in reality.

Certainly you can build taller buildings, which can reduce demand for land (living and working space) elsewhere -- not that a monopolist would care! Of course, those overshadow nearby plots, and in a solar power but not space world there's only so much interception area to go around. Which can be improved by tech -- up to a point.

Lack of immortality and having new births... doesn't help the newly born poor. If the wealth-holder expands in population, of course that can split that wealth. And conversely, maintaining equal rights to natural resources over time seems to strongly suggest having social control of population growth. Not an urgent need right now (except perhaps in the reverse direction) but a potential concern.

Certainly you can build taller buildings, which can reduce demand for land (living and working space) elsewhere -- not that a monopolist would care!

In any situation other than a total monopoly, the owner can make more money from improved than from unimproved land. "Taller buildings" can vastly increase the square footage available to rent out, especially with technological improvements (improved structural materials, faster elevators etc.) which make tall buildings more habitable. Buildings can also grow downward. Finally, one can make a building more luxurious by investment in its facilities.

Of course, those overshadow nearby plots, and in a solar power but not space world there's only so much interception area to go around.

Solar power works poorly in intensively built-up areas anyway; if this became a major issue one could work out a system to compensate owners of overshadowed airspace. I think that in the long run nuclear and space-based solar power will far surpass ground-based solar power anyway.

Lack of immortality and having new births... doesn't help the newly born poor.

You are assuming zero social mobility. If social mobility is possible -- if people can gain or lose wealth, as is the case in an even minimally-free economy -- then it make a big difference.

Lack of immortality means that some enterprises will pass into incompetent hands, creating market opportunities for new entrants. It also means that inheritance is possible, increasing the personal fortunes of the heirs, whether competent or incompetent.

New births means that the constellation of talent is not static. Some of those "newly-born poor" will become richer over the course of their lives.

And conversely, maintaining equal rights to natural resources over time seems to strongly suggest having social control of population growth.

You're assuming a static environment. This is only true if technology is stagnant. Advances in technology increase the size of the exploitable environment both through intensification (better techniques for extracting and processing) and expansion (gaining economic access to areas previously too expensive to exploit.

In a market-based system, "social control of population growth" comes through the ability to support (or be supported by) one's children. One of the hazards of social safety nets is that they encourage those on them to have more children than they can support: probably the long-term solution is to control births of people making extended use of such social safety nets.

In fact, even in a total monopoly, the owner can make more money from improved land, because people on improved land are more productive, and the owner can't charge higher rents than the tenants can pay, or the exercise is pointless.

This probably comes out of the 18th/19th utopian view of "primitive" societies like the Inuit, which were often held up as examples of communism/democracy in nature. These noble savages were untainted by the commercial world and therefore happy, the thinking went, therefore if we could somehow get rid of our corrupt commercial society and return to the pure state of natural communist/democratic/insert-gov-system-here existance, we too will be happy.

Heh. While yesterday I kept running into Wikipedia pages on money topics that mentioned red ochre apparently being traded 100,000 years ago, and equally old strings of shells that might have been just jewelry but could have as easily been wampum type things, especially if found inland.

Stone-age economies routinely trade durable and portable regionally-produced goods, such as choice flints, salt and seashells. Not all sites yield these products, hence it is worth the while of the stone-age people to trade these goods across long distances.

I think that the assumption is that some future economy would be so productive that everyone would get everything they wanted at effectively zero cost to the "means of production." This concept seriously underestimates the human capability to "want" -- aggregate desire will always exceed any productive capability.

Consider this: almost everyone in the First World now lives better than a middle-class Sumerian of 3000 BCE. Have we abolished unsatisfied material desires?

Granting that competition isn't ever going away, is money going to exist as long as the human race does, or might increased intelligence (whether computer-mediated or not) make money obsolete?

Well, obsolete to be replaced by what? You might reply "we can't know, it takes increased intelligence" but while valid that doesn't seem productive.

Basic resources seem to be energy, individual elements in manipulable forms, time and attention, and location (largely with respect to large lumps of not easily manipulable matter.) If you have transmutation elements can get folded into energy in all its potential and material forms. If you focus at that level, do you drop money in favor of explicit accounting? I don't know. But the original money was rare resources, and food, perhaps we just go back to that.

You could have complex accounting systems which pro-rate things based on how much the individual wants them. But all you'd really be doing that way is creating a clunkier substitute for the market -- which does that already. There seems little point in doing so.

Money is not "the root of all evil," but it is a messenger. And shooting the messenger has a long history. People don't like money because their own lack of money, or the rising price of something they want, is sending them a message they don't want to hear.

S	M	T	W	T	F	S
				1	2	3
4	5	6	7	8	9	10
11	12	13	14	15	16	17
18	19	20	21	22	23	24
25	26	27	28	29	30	31

Rich and Strange Aeons

So what's the attraction of moneyless economies?

So what's the attraction of moneyless economies?

no subject

no subject

no subject

no subject

no subject

no subject

no subject

no subject

no subject

no subject

no subject

no subject

no subject

no subject

Real Estate Economics

Re: Real Estate Economics

Re: Real Estate Economics

Re: Real Estate Economics

Re: Real Estate Economics

no subject

no subject

no subject

no subject

no subject

no subject

no subject

no subject

no subject

no subject

no subject

Profile

January 2026

Page Summary

Active Entries

Expand Cut Tags

Style Credit