Group Currency
groupcurrency.org
groupcurrency.org
(This has nothing to do with whether basic income is a good idea or not; the point is that this does not appear to actually be basic income except at an extremely superficial level. Nor is my calling it a "wealth redistribution" scheme intended to be a criticism. I'll admit to being extremely skeptical about basic income, but that is what it is, just like EITC. Whether redistribution is a good idea is a separate discussion I'm not trying to have here.)
CryptoUBIs/group currencies can be deflationary. Have a look at the first item in the FAQ [1]. If the value represented by AcademicCoin is increasing faster than the issuance of tokens, AcademicCoin becomes deflationary.
[1] http://groupcurrency.org/#FAQ
Disclaimer: I am a co-author of the document.
>Provide others with a token that represents the group's value and potential as human beings. That is already non-zero (researchers are very valuable!).
If that's the logic, you can do that today without any cryptocurrency. Take a blank sheet of paper and write, "the bearer of this note acknowledges my value & potential as a human being."
Go and take that paper out on the street and see if you can trade it for other pieces of paper such as Euros, US Dollars, or real goods such as hamburgers. If your experiment works, everyone can have "basic income" just by writing affirmations on sheets of paper and trading them.
I'm not being flippant with my example. Warren Buffet can take a piece of paper and write, "the bearer of this note is entitled to a 1 hour lunch with me." Someone could take that note and sell it on ebay for over $1000. (A similar type of transaction happens everyday with celebrity autographs.)
There's a reason why Warren Buffet's piece of paper (scrip, IOU, whatever) is more valuable than your piece of paper or my piece of paper. Cryptocurrency doesn't solve that. Basic income is also not something that can be solved by cryptocurrency.
Yes, but that's tautological, simply the basic definition of "deflationary", not an argument.
If the act of issuing tokens is disconnected from the process of bringing value into the given ecosystem, then the act of issuing tokens is merely inflationary. If the act of issuing tokens is directly connected to bringing value ("Bob brought X units of value in, Bob gets X tokens"), then it's not really a basic income. You have to be able to remove value from some people and give it to others to create a basic income. In theory if the system were already bootstrapped inflation might be able to do it, but it would be an awfully blunt instrument, and might well still collapse the system in a standard inflationary spiral. Where basic income may be advantageous at a societal level, where the mechanisms of government can be used to force participation, you've got serious incentive problems in a voluntary system. Why wouldn't someone generating a lot of value simply opt back out of a system that deflates it away on them, when just by stepping away from it they can avoid the problem? Who's going to voluntarily sign up to be the one giving away value to others?
The libertarian skeptical about basic income (me) can't help but observe you really need government to make basic income work, if it's going to work at all. In fact, even with a government we can all observe in the real world that those with a lot of "value" (wealth) are often able to wiggle out from underneath their putative obligations even when it's not voluntary.
True, the process of issuing tokens disconnected from new value is inflationary. But that doesn't imply that the currency as a whole is inflationary.
Some members might not be doing anything for some period of time and simply inflating the currency while others are deflating it through value creation. But sooner or later those folks will produce something of new value that deflates the currency while others take a break.
It's certainly possible. Universities do this for their tenured professors today and it seems to work out fairly well.
See also this reply: https://news.ycombinator.com/item?id=9501494
In most macroeconomic models, the question of "who makes the money" is abstracted into "the banks make it and lend it to everyone." That means that money has to start in the investment sphere - the expected impact on individuals is to experience cheaper debt and higher wages and prices - a sort of "regression to the mean" in their financial status.
But in a situation like the post-GFC markets, investment tends to slosh around in financial instruments without reaching Main Street in any meaningful way - the money isn't turned into capex or wages. This is the kind of thing that is smoothed out when the inflation is reformulated as a benefit. Individuals still experience the regression to the mean, but it happens instantaneously, on a predictable schedule.
For physical currency is has some obvious practical problems, which has prevent adoption, but for virtual currencies it is easy to implement.
Cash purchases would be problematic. Maybe drawing out cash incurs the variable tax too?
Libertarian free market economics don't capture these constraints.
In reality, though, it seems the poor will vote as much of it for themselves as they reasonably can. It's happening piecemeal here (in America).
It would be more accurate to say the rich are voting just enough to the poor to prevent widespread active looting.
It's the rich who've made it a practice and habit to grab whatever they can, whenever they can; excepting those who were merely born rich, that's why the rich are rich.
But it is exactly as you said, recent changes in campaign financing policy and PAC funding has made it easier for the wealthy to preserve their position.
What's circular about it?
The poor don't influence politics via campaign donations, the poor have less access to politicians.
The poor don't take advantage of what little political influence they do have--they vote less, as well.
The rich, on the other hand, use every influence at their disposal to enrich themselves.
If the poor had a tenth the willingness to go out and exploit the system the rich do, we'd see a far more equitable distribution of resources than we do.
Why are they poor? They didn't vote to redistribute. Why didn't they vote to redistribute? Because they're still poor.
I'm not disagreeing with you, just saying that it's disingenuous to claim "poor people haven't tried because they're poor".
What's the difference? Assume that a group of people have an expected group of behaviors. If they had a different set of behaviors, they could remove themselves from the group. But if they don't have those other behaviors, they aren't able to remove themselves from the group. Are they in the group because they are in the group (as you have been saying Frondo has been saying)? Or are they in the group because they don't have a set of behaviors to remove themselves from the group (as I interpret Frondo as saying)?
In the context of poverty in the US, there are countless structural, cultural, behavioral, and just daily life practicalities of why rising above poverty is very difficult. While I don't agree that the lack of political motivation and clout are the only or primary reasons for continued poverty, I do agree they are substantial contributing factors.
And I agree, politics isn't the only place where the poor in this country fail to maximize their advantage, it's just one place where they're consistently trodden upon.
And there's that saying about democracy, the poor voting themselves free benefits, whatever, that's just so very wrong. It's just another substance-free attack on the least politically empowered group of people.
Then you immediately say:
"What's wrong with wealth redistribution?"
Come on.
Naively attempting to do that using currency manipulation as your only tool seems doomed to failure, in my opinion.
I don't care to argue for or against basic income at the moment, but presuming that it is to be implemented, the task cannot be accomplished with an alternate currency. I think that ultimately, it will be necessary to threaten highly productive owners of capital with the use of force unless they meet some portion of the consumption requirements of non-working individuals.
The producers would be taxed, at a cruelly high rate, such that if they sold a product that is both appealing and affordable for the people on basic income, they would break even on a cashflow basis, only losing some use of their productive capacity. For some made-up, spewed-out numbers, Apple is taxed $1G on the sale of 4 million of its fully-featured iPhones, at $250 cost and $750 retail--effectively taxing 50% of the profits--and recoups $1G in revenue from selling 20 million "Nekhama iPhones" (Nekkhamma is a Buddhist term) that cost $25 to make, and sell at $75. Maybe it's just the same guts as an iPhone 1, using a smaller chip feature size. Or they could just tell that $1G to go piss off, and less prestigious manufacturers pick up the slack in the basic market. Obviously, sales in the basic market could not trigger the onerous taxes, or the scheme wouldn't work.
Some combination of a tax on luxury goods and services, low income housing, and regulation on food production might be one way to offset the resources required to sustain the basic income output.
The scenario of thousands of citizens living purely on basic income in free housing projects should also be considered. What is the minimum level of contribution we require from citizens in return for the minimum level of support that the State provides? In some countries, it's required to do a year or so of public service though the equivalent of peace corps. It seems fair to ask for a minimum level of work contributing back to society in exchange for society providing a minimum level of life support.
I think BI proponents argue that specifying what counts as a contribution leads to economic inefficiencies, in the broadest sense. Does taking care of your own children count as a contribution? Or sitting in the pub and making other visitors happy by your presence? What about writing software and putting it on Github? And for the latter, should you get a minimum number of stars to make it count? How long should the list of "useful activities" be, that the Department of Civil Contributions would maintain? And how much money would we spend on civil servants who determine whether your edge case qualifies?
The result would be that people end up doing artificially much of what counts as "contributing", and too little of some things that aren't specified as "contributing", but that society actually still benefits from.
Would some people just sit on the couch all day, and really contribute nothing, by any standard? Yes, probably. So the premise here is that the number of true freeloaders is small enough, that it would be inefficient to worry about them. I personally don't know any true freeloaders, which leads me to think that that's probably a fair assumption.
The matter of what is acceptable as "basic work" may already be in place as court ordered community services, peace corps, or local public works projects. Maybe even a new variation of non-profit organization [1] that has specific structural rules for "basic work" credits?
Basic Income is, by itself, already a compromise. To compromise again is to no longer be a separate concept.
At the point you're talking about, it's not actually different from the situation as it stands now: what you're really saying is that the minimum wage needs to be sufficient for living expenses. Nothing more.
Now we have robotic tractors that can operate with a tiny amount of human supervision. The Industrial Revolution made it possible for children and elders to not work. We do not begrudge them their allowance, because their labor was no longer needed. Female integration into the workforce further lessened the need for the marginal laborers.
Computerized automation has further lessened the demand for unskilled labor to such an extent that the equilibrium market rate is likely below subsistence level. Minimum wage laws transform that into unemployment. People want to work, but cannot find enough to pay for their consumption.
You are demanding that people work, but you are not explicitly making the inchoate demand that someone be forced to buy their labor. It is not needed. We have enough bullshit jobs already. It may be time to end the charade and find more reasons for people to choose to exit the labor pool. Lower the retirement age. Guarantee living expenses for both graduate and undergraduate students. Extend maternity/paternity leave out to a whole year. Simplify disability payments such that everyone who cannot lift a 15kg mass from the floor and move it 20m is exempted from work that may require it.
I would very much prefer that the people doing work be both competent and motivated to do the work, rather than grudgingly present as the means to pay their bills.
The minimum I expect is zero. I don't want anyone to create more bullshit jobs that occupy people with busy work. Let them pursue their vocations instead.
It might be great to let the robots do everything though.
Would your observations be explained by removal of the implicit requirement that one must do work of a particular type to survive, or could they also be explained by conditioned helplessness, where people receive negative stimuli in response to attempts to change their own lifestyle?
The welfare system in many US states is not a great model for predicting human behavior in an environment where the basic needs are not particularly scarce. In any case, an unmotivated, stagnating person is preferable to someone who becomes violent and destructive. I'll take 1000 couches filled with 1000 semi-professional marijuanologists over one angry arsonist any day of the week, and twice on Fridays.
As for any reform that would help treat, rehabilitate, and employ [1] former convects (or differ to rehabilitation programs instead of the money sink hell hole of the prison system) - that would bring a welcome and significant impact to all the millions of dollars, lives, time and resources wasted on for profit prisons and the vicious cycle of convicts with no where to turn.
[1] http://www.triplepundit.com/2014/07/3p-weekend-10-companies-...
Maybe my thinking is off, but isn't that the sort of capacity the "group fund" could go toward building?
The real fallacy is believing that wealth is a concrete entity.
Example: say we're a group of musicians, starting a MusicianCoin group. I happen to be a fairly shameless participant, so I enjoy the basic income while I'm still bootstrapping my career, but one day I hit it big, and now my concerts are all sold out for the next year (and of course, tickets are sold in exchange for MusicianCoins).
Do I give back to the group? If I want to do that, that's easy: I just sit on my newly earned pile of MusicianCoins, and wait for the steady rate of minting to dissipate the value away to other members of the group. But what if I just exit my position immediately? By trading my MusicianCoins for dollars (thereby putting downward pressure on the value of MusicianCoin), I'm avoiding giving back any of the value I created, I think?
I think this is what makes it fundamentally different than a tax-based basic income: you can't (legally) opt out of taxes.
Nothing is preventing this musician from selling their MusicianCoins. If there are enough coins and enough musicians it won't do much to the price if the market knows how to value the coin properly. The musician might simply end up losing out on a profit by this action. Depending on the situation, maybe they might end up annoying the group and getting kicked out, who knows. It shouldn't be an issue though, just as it's not an issue with company shares.
The reason why I think even a single exit might do a lot to the price of MusicianCoins, is that financial success (not only in the music industry) seems to follow some sort of power law: a very small number of members amass a large part of the wealth [1].
Do people behave like this in real life (ie abandon their group when they strike success)? Well certainly not most people - men like Warren Buffett and Bill Gates haven't taken up citizenship in some tax haven to opt out of US taxes - but IIRC one of the Facebook founders did.
There are at least two reasons why it may be a bigger problem for MusicianCoin than it is for the USA: 1) the group size is bound to be smaller, so a single such event would cause a bigger shock, and 2) it's a much easier decision to sell your crypto-coins than it is to move country.
Of course this is all arm-chair economics on my part, and I actually hope you're right that in practice it's not such an issue - I love the idea and would love to see it work well.
[1]: see these sort of numbers, where the top 1% pay 23% of taxes: https://www.vox.com/2015/4/14/8406445/tax-state-local-distri... - and I reckon what would have been really interesting is if they had broken it down to how much of that 23% is carried by the top 0.1%
Edit: ah wait, I think I know what you mean. When I wrote they have "no built-in basic income", I meant "no built-in Basic Income" - as per the context of this thread.
This system seems to want to do that... but without the part where people's actual money is being redistributed. I don't get it.
Whether that can sustain a "basic income" remains an issue not directly addressable by the scope of "Group Currency"
It's not clear to me why the value created by people living inside those types of communities should be aggregated into a single monetary device. In a town, there are various groups of people working together to produce different products in different kinds of economic activity. Some make profit and thus can distribute the produced value, some don't make profit and can't distribute anything.
Those groups are usually called companies, corporations and so on. They already have a system of exchangeable tokens representing both ownership and decision rights regarding the activity of the group and the redistribution of its produced value. Those tokens are called shares or stocks. It's a nice system that does not work too bad, though I'd agree that a bit of decentralization would be welcome.
But fusing those tokens from different companies into a monetary tool that would represent the activities of a larger group controlled by political structures such as a "town, city, state or country", seems to be a gross loss of granularity that would probably result in dramatic economic inefficiencies.
Also, how do you address the problem of goods and services with income-elastic price points? A UBI scheme will cause prices to disproportionately inflate in lower-income markets, i.e. housing will be just as inaccessible as it was before because the income increase.
So what you're saying is that I can get value that someone else has paid for with their hardware and electricity bills, without having to do anything except be on a list? Sign me up!
Since each member gets regular basic income and are verified with KYC (to prevent fake identities) this is just how money is handled among friends. Alice owes Bob a dollar and Bob owes Carol a dollar and Carol owes Alice so it all eventually settles. Just the friends in this 'group' keep a record of it.
Why do they need mining then? They don't. They just need a ledger of all the loans.
If a ledger can serve as a currency system then why do we even need mining? Because users could fake multiple identities, to receive the basic income. Mining is required to solve this 'money generation' problem.
In bitcoin, not everyone gets basic income but only the ones who do some work to maintain the ledger.
What group currency is, is called hawala.
You mention bitcoin, and tumbling is exactly how money launderers and tax evaders use bitcoin's "public ledger" today.