Two Currencies

[Jack Waugh]

I wonder about the merits of a monetary system with separate currencies for labor and raw material. This could be used to implement an economic system at an intermediate point between capitalism and socialism. It would use market forces more than say the USSR did, but would change the constraints and boundary conditions surrounding markets in a different way to contemporary capitalism.

There would be two distinct currencies, both established by government fiat, to command resp. labor and raw material.

Maybe the units for labor could be called "pesetas" and the ones for raw material "kroner" ("krone" in singular). Or other names could be used, such as "dinarii" and "marks".

Products and services would typically have prices with a component in each currency. So a hamburger for example might cost you 30 pesetas + 2.5 kroner. If you don't have both components, you can't afford the product.

Workers for the government would be paid a salary in pesetas only.

The peseta portion of all products would be taxed. The revenue from this tax would allow the government to pay for labor in government service. To make this tax progressive, a portion of it could be paid back to citizens at a fixed monthly rate.

The government would own all minerals that are underground. It would set kroner prices on minerals that private enterprises extract from the ground. The enterprises themselves would supply the equipment and labor to do the extraction, and would pay market prices for those, but would still have to pay for the minerals themselves.

The government would own all land. Land could be leased for terms of several years and the government would set the lease rates in kroner. Land used for dwellings could be subsidized. Rates could differ between farming and industrial uses.

Every month, the government would issue a fixed number of kroner to each citizen. Only a human individual can be a citizen.

For certain kinds of pollution, of types not prohibited outright, the government could collect a fee in kroner. However, a better policy if possible would anticipate this pollution cost in pricing the raw material in the first place. If a use is made of material that could have been used in a way that would have polluted, but instead, it is used in a way that avoids the pollution, the government could pay a partial rebate.

Private entities would be free to offer exchanges between the two currencies. They could charge for this service.

Entities could contract with one another for goods, services, payments, other forms of cooperation, similarly to how that works today. However, the government would have the authority to prevent private firms from acquiring too much power over people via monopolies etc. The government could administratively reorganize corporations or even take away their charters, liquidate their assets, and pay the proceeds to the shareholders. These actions would not require a legal defense; they could be done as administrative decisions for purposes of implementing national policies.

Private ownership of factory machinery, etc., would not be forbidden out of hand. Government enterprises, however, could compete by owning machinery as well. Government enterprises could be established by law or administrative action.

At least one chamber of the national legislature would be comprised of women elected by women. This would have full and sole authority over all matters directly relating to the human birth rate. This could include coercive controls and policing. Male human adults (hereinafter "wermen") would have a constitutionally protected right to opine and argue in public about such matters, but would not have a vote for that chamber and that area of concern. Representation in the women's chamber of women who inherit wealth from a history of theft of labor or land would be limited to strictly less than 50%, even if such women make up a higher proportion of the overall population.

At least one other chamber of the national legislature would be elected by the public at large. A given woman or werman would have an equal vote for this, irrespective of sex. This chamber could pass laws not directly related to the human birth rate.

The government would have the authority to identify individuals and track ancestry.

As a matter of law, familial inheritance of wealth could be limited or eliminated.

The government would have the authority to arrange benefits in kind for people for purposes of general welfare. It could use both kinds of currency to command these benefits.

[cfrank]

@jack-waugh I don't know how practical this would be, but I understand the concept of trying to disentangle the labor and capital economies. I am not a labor economist, sociologist or Marxist/capitalist theorist by any means, but it seems to me that the central issue here is the negotiation of real equitable wages, and I think that introducing a less predictable signal of market efficiency in the form of a variable exchange rate between labor and capital currencies seems would likely obscure whatever gleanings of fairness might be observed.

I think capital and labor are inextricably connected. As I see it, they fulfill the specialized directive and performative roles of project completion. Philosophically, there is already a solution to the negotiation between these roles: law and unionization. My conception is that these institutions are supposed to correct directives that are maligned against equitable wages for labor workers while preserving the directive incentives of capitalists so that socially beneficial projects can be completed.

Also, just sociologically speaking, this kind of currency splitting would externally impose an objective class distinction between labor workers and capitalist entrepreneurs, which I don't think is a good thing.

[Jack Waugh]

@cfrank said in Two Currencies:

I am not a labor economist, sociologist or Marxist/capitalist theorist by any means

Me, neither. Although I do remember that economists call all raw materials "land".

disentangle the labor and capital economies

More the labor and land economies. As an example of capital equipment, consider a machine that can separate the edible part of rice from the husks. It is probably made mostly of steel, using labor, and the steel is in turn made from iron ore and coal and so on, and additional labor. The land and labor components will be reflected in the two-part money price of the machine when it is proposed to be built and put into use, or when it changes hands. How that translates into rents and/or interest, to reflect the value of using it as a durable machine over time, I suppose that a free-ish market constrained to honesty would result in those also having two parts, reflecting the original costs.

class distinction

I wonder how that would arise and maintain itself. Familial heritage would diminish in importance, I think, due to everyone receiving a dole in land currency and labor currency and possibly also receiving housing, medicine, surgery, education, and food through the government, as I said it has the authority to provide benefits in kind in pursuit of public welfare.

[GregW]

@jack-waugh

The Alliance for Just Money may interest you.

Their program:

Require Congress to be the sole creator of all U.S. money debt-free.
End the privilege of commercial banks to create money.
Transfer all remaining operations of the Fed to the U.S. Treasury.

Government creation of new money will be limited by an independent public agency whose only function is to determine how much new money, if any, should be issued each year (or withdrawn), adhering to a mandate to keep the purchasing power of money stable.

This agency’s decisions will be based on economic data (most of which is already being collected) and citizen input. How that new money is spent, invested, given, or lent is up to Congress, which has the constitutional responsibility not only for creating our money but also for allocating federal government spending.

Don't know if it would work, but it would give capitalists conniptions.

https://www.monetaryalliance.org/