Thinking of Money as an Information System

People typically think of money as something that you "own", but it can also be empowering to think of a money system as an information system that keeps track of who has done work to provide value to an economy. Here I explain this new way of thinking of money, and how thinking about it can be liberating because we then realize that we can brainstorm new and radically different ways of designing an information system to organize or manage an economy.

[@sylviaodhner]

This is interesting. Money may have started out as a way for people to keep track of trade, but it's turned into something that people need if they're going to fit into the structure of society that we've built. So while I think it's useful to think of it as a system of keeping track of things, in our society people often receive money just because they need it, not because of anything they've done. And maybe there wouldn't be so much need for that if there were more economic equality to begin with, but there are always going to be people who need more than others compared to the amount they're able to give, like people with disabilities. So I don't know how to address those issues economically, except that I think if we are going to continue to have individuals be dependent on money, I think it's important for people to receive money in a way that isn't directly connected to what they've provided.

[@AlexZorach]

I agree about money being necessary for most people living in modern society. When you talk about people "receiving money just because they need it", whether through social welfare programs, or financial support from charity, friends, or family, this is something that lives in structures built on top of the monetary system, not in the monetary system itself. This is an important distinction. So for example, the government administers many support systems through a sort of "tax and spend" approach: they raise revenue through taxes, and then they spend through social welfare programs or spending on public goods. You could still have these sorts of support systems in any economy. But this is not what I'm talking about in this video. I'm talking about changes to the money system itself, the basic rules of how it works, and its basic structure. If we do a better job of designing the money system, this could address some of the problems in society on a systems-level. If we do this effectively, it will reduce the need for support through government welfare spending and/or charity. For example, a large portion of government social welfare programs targets poor or economically-disadvantaged people. A lot of this dysfunction can be seen as being caused by a money system that rewards people more for already having money, than for doing productive work, thus causing wealth disparities to perpetuate or become magnified. If we change the way the money system works, for example, diminishing money's function as a store of value (like in the stamp scrip example) and implementing some mechanism for issuing money such that money is issued more equally, like directly to people on a per-head basis, this might hugely diminish economic disparities in such a way that greatly reduced the need for government welfare and/or charity. Similarly, if our money system were redesigned in such a way that removed the need for continual growth in order for the economy to be healthy, this might cause a lot of people to move more transactions out of the cash economy, so we might see things like people working fewer hours, and more families with one stay-at-home parent. This could free up people's resources to provide for family, friends, or community members in ways that didn't involve transfer of currency. So part of the problem of providing for people with disabilities or additional needs, might solve itself. This is the sort of change I'm calling on us to envision. I see a lot of the governmental social welfare and charitable expenditures in our society as somewhat of a "band-aid" solution, whereas what I want is a system solution, if that makes sense?

[@sylviaodhner]

Yeah, that makes sense.

[@anonimatovato8384]

I would like to add, welfare is seen as a 'punishment' in this society, a product of 'your mistakes', again, punishing poorer people and rewarding rich people. And let's not even get started how bad the economic inequality is on 3rd world countries.

[@AlexZorach]

I'm not sure I have often seen welfare described as a "punishment", but...I do think it has a negative connotation or stigma associated with it. I think the views on welfare here in the U.S. are complex; conservatives seem more likely to have a stronger stigma on it than liberals, but plenty of liberals also have a stigma on it. But not all...I know a lot of people who are ardent advocates of increased social welfare programs. From talking to conservatives who are opposed to welfare, and reading about the history of the current system, I think the "punishing" aspects of welfare (i.e. having to put out a lot of effort filling out paperwork and trying to qualify) doesn't stem so much from a desire to "punish" poor people as from a desire to determine whether or not people really "deserve" the aid they are given out. The effect it has on people may turn out to be a lot like a punishment, but I think the intent is somewhat different. Interestingly though, I think if you start looking in depth at the experience that people on welfare have with all the bureacracy and red tape, and you look at how much energy and money is put into administering these systems, you end up with a strong point that can sometimes convince conservatives, especially those for whom fiscal conservatism is their highest priority, to simplify welfare systems and remove some of the hurdles. The reason is that a lot of the bureacracy ends up costing more to administer than it saves in terms of people not given welfare, so it can sometimes be cheaper to simplify the process and give it out more easily. These are all reasons though why I support a deeper, more systems-level reform like rethinking the money system itself. I'd rather eliminate the need for welfare to begin with. This whole conflict or tradeoff becomes a moot point if the huge wealth disparities were smaller or didn't exist to begin with.