Without getting to alarmist – I foresee catastrophic economic turmoil. Monetary economies are suffering major problems. Without getting bogged down in details – I think this has been caused by several conflicting mechanisms:
(i) there is ambiguous global economic growth. This is no longer true as peak-oil and the (alleged) effects of resource depletion, global warming and environmental degradation rear their ugly heads. Economic growth is now disparate, uneven, out of equilibrium and haphazard. Too many people are losing in this game and many people are becoming angry.
(ii) citizens in fair measure benefit from whatever economic growth we have. This is no longer true as globalism, outsourcing and visceral automation sweeps the globe. Read “lights in the tunnel” and “hot, flat and crowded”. Big companies and shareholders win far out of proportion to real people. This is no empty bromide – an elite is getting far to rich, and massive teeming populations are not catching up fast enough, if you are too judge on arguments of humanism, empathy and fairness.
(iii) we can no longer trust fiat currency monetary systems – the generation of new currencies is dependent on the whims of ‘in over their head’ state monstrosities and career politicians. We can’t trust our leaders to do the right thing and quite often our leaders don’t even seem to know right from wrong.
This system has become unsustainable.
Having deliberated the conclusions of BitCoin, the implications of the economic collapse all major economic and industrial world powers are currently facing, devaluation of currency, populist/producerist sentiments, make the following statement. This should be the new economic order.
* In a world that claims to be global, with a(n allegedly) free supply & demand of goods in services there must be freedom for all to create and use all currencies, provided;
(a) Management, creation and destruction of the currency is made a transparent part of the public record;
(b) the coin is ruggedly resilient against falsification;
(c) any local collective of democratic electorate where the coin is used can claim a fair share of the coin system used to spend on public works;
(d) all humans receive enough equivalent value as a basic income in a coin of preference to guarantee them the bedrock basics human life, obtain minimum quality food, better yourself through education,
States should no longer be allowed to have a monopoly over printing coin and here is why.
In the current economic system states predate on all by having unbridled monopoly over money creation. States will unavoidable (be able to) tax (harvest) any coin, and bring full violence to bear on all its citizens. This mechanism is evolving towards disharmony, and the same arrhythmic of human history this has escalated into billowing, bloated and unsustainable bureaucracies, shilling, corruption, pork, corporate (and other) welfare entitlement culture and populist/demagogue politicians cultivating and empowering systemically stupid under-classes to further their own agenda. The general rule seems to be it ends in authoritarianism, overprinting of money, societal disparity, harmony and scape-goating – and variants of ‘kristalnacht‘ bloodshed.
In a world where effective terrorism is as cheap as a trip to a mall, or revolution is as easy as a mouseclick, this kind of escalation is no longer acceptable. Politicians who accept these risks are not professional, moral or competent at their jobs. Discontented voices can no longer be silenced, underclasses will no longer accept the unacceptable, and minorities will no longer be marginalized safely.
What we need is to make currencies compete and completely free from central control. But you want all legal tender to be accessible in a state – if it is used, a state should be able to ‘tax’ a currency. If the currency creator doesn’t like it, the currency creator (a financial institution) leaves the market.
Likewise any citizen should be able to have a decent standard of living as can be afforded by the state entity he or she is in. A state is in essence a communalization (nationalization if you will) off local resources and a declaration of monopoly on force with the intent to maximize justice as well as efficient management. In some states this is a asymmetrical – we call that “apartheid”, but that is simple – the end goal should be free traffic. A state exists solely to maximize the good of all of its citizens. A state that serves only its empowered elite needs to end.
A state would fear all of its citizens – and elites must respect its less well off citizens needs. Those that can’t cope should be able to leave. Or those that wouldn’t or couldn’t must be granted a vote to take a portion of any currency claim in that particular jurisprudence as taxes.
A monetary entity (A “bank”) wants it’s currency to be used widely – but it has to publicize data on falsification, anti-falsification methods, or increase of its legal tender, as well as acceptance. If a currency is widely accepted, that’s good – but if a local state taxes the currency too much for whatever local interest, investment or populist goal the coin would devalue or be sucked into a jurisprudence – and a bank can stop offering service in that jurisprudence. Say; a pound Sterling is used in Europe by “The bank Brittanica” but if the Eurozone taxes too many Pound sterling for its own ends, then the Bank Brittanica would be forced to get up and leave, and the currency would become informal. There would be a balance between market penetration, banking utility, and economic power. For instance there might be a non-profit or NGO called GoldBank, which publicize data on gold availability, and there might be a “KrugerandBank”, which just would happen to use a specific gold denominational currency. Of course any bank would be free to publicize money at will – but if they weren’t disclosing in full how many coins there were in the market nobody would consider for a second to part with goods or services in exchange for that currency, right? Generate a currency that is stable, credible and falsificationproof and people will use to to barter goods and services. BitCoin is evidence in that.
The flip-side is that any citizen must have a constitutional right to demand from his state a humane existence. States can then argue what a humane existence is, but I see no other alternative than the implementation of a basic income. Why I think a Basic Income is unavoidable in the next 10-20 years for most powerful, diversified democracies in the world in the world is a topic for another article. Citizens should be able to generate a decent quality of life, if not by labour then by potlatch. If too many citizens sit on their laurels in a particular state, the state suffers economically, and must take policy actions, in the form of investment (or austerity), or banks, service providers and corporations would get up and leave.
This favours the creation of large economical blocks – but we already have those. This system also favours a nice balance between what is sustainably democratically, what is sustainable governmentally (and bureaucratically), and what banks and corporations can get away with.
Right now we internationally do not have checks and balances. This would be a nice start to implement checks and balances. It would constrain out of control populists and their demogogery/producerist shpiel, out-of-control corporate power, run-away inflation and unaccountable banking systems, out of control democratic entitlements and welfare systems. Best of all our currents systems are failing and if BitCoin proves one thing it proves that the current geopolitical financial order is under severe and irreversible threat.
This is just a quick article. I will update and rewrite this article as I get more ideas on the topic.