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Moneyless World

Early humans felt the need to create small communities, in order to protect themselves as a group rather than individually, and to fed themselves through organized hunt or fruit gathering. All work was performed for the profit of the community. These were small groups of people, comprising a few families and generally less than a hundred individuals. However, as these communities formed larger societies, they began to exchange goods among them. This was useful if one of the communities had a bad hunt for a while, while another one had an excess of food.

Soon, as societies evolved to larger groups of several thousands of individuals and work became more diversified, people felt a need to proceed to the exchange of goods and services on a more individual basis, rather than for the community as a whole. At that point, people began to feel it was unfair to work for others and get nothing in return. People began trading goods and services with each other in a way which appeared fair to both parties.

Barter

Barter is the direct exchange of a good or a service for another good or service between two individuals or organizations without the use of a monetary system. A carpenter may come and fix my door while I fix his computer. A pig farmer may give a cow farmer two pigs in exchange for a cow. If I have an excess of purple corals, I may exchange some for some red corals. This kind of exchange is beneficial for both parties as it allows to get rid of unwanted or excess goods in order to acquire needed goods, or exchange services in between people who have different skills.

Barter, however, have a number of limitations. A barter can only occur in between two people who happen to mutually have something or a skill that the other person need (double coincidence of wants). It may also be difficult to make exchanges of equal value. For example, we all know that one cow is worth a lot more than two pigs, but the pig farmer could probably not afford to get rid of the many pigs that would be worth a single cow. Indivisibility of certain goods make it impossible to proceed with certain transactions, such as the pig farmer which only has two spare pigs, but can obviously not get a quarter of a (live) cow for them. Lastly, the difficulty to store certain goods make it difficult to conduct certain transactions in real time. For instance, a wheat farmer could not easily exchange his excess with a corn farmer given that these aren’t harvested in the same season and cannot be stored for long periods of time. Furthermore, it would become difficult to keep records of who owes what to whom if these transactions were to be completed over long periods of time.

Money

Barley grains

Barley grains

In order to fix the limits imposed by barter, money was invented. Money could be used to obtain goods or services without any direct exchange, even if the other individual didn’t need anything that you have in excess or any of your skills. Good and services could be evaluated to a precise value.

The first money-like system is thought to be from Mesopotamia about 3000 BC. They used barley, a common commodity, which they valued by weight to obtain goods and services. Later, shells were used as money. Entire shells from the sea, or part of them, or even artificially shaped pieces of shell, were used as money. Shells had a value as a body ornament. Shell money appears to have been in use in many societies of different continents. These forms of early money are called commodity money, because the value of the currency is based on the perceived value of a standard commodity which is desirable (or even needed) by all individuals.

Soon enough, gold and silver became the new standard. The value of those metals was based on desirability, but mostly on scarcity. Goods and services were valued relative to their weight in these metals. Other metals, such as bronze and copper, were used to represent smaller values. To simplify the use of metals in regular transactions, from about 600 BC, governments stamped these metals into coins which were of verified weight and purity.

Banks

Roman coins

Roman coins

It was obviously inconvenient for people to carry around large amount of metals, and banks soon appeared to help. People could deposit their coins in a bank, and receive a letter redeemable for the metals deposited. Over time, people began using these letters to buy goods and services rather than use the metals directly. With the advent of printing in the 1400s, bank letters became banknotes, official printed pieces of paper of nominal values. Banknotes were still redeemable for metals, but beginning in the 1600s, redemption was discouraged. Instead, the banknotes were becoming the sole currency. This is called representative money, as banknotes are used to represent a certain amount of a commodity, but such commodities are never used directly for a transaction.

To make a profit out of the people who deposited their metals, banks borrowed the metals at interest. Since they never actually took the gold out of the vault, but only issued banknotes, they could borrow the same money again and again, collecting interests on money they didn’t even have. Since more money is required to payback the original loan, more is printed. This causes inflation, a rise in prices which lowers the perceived value of money.

Over the last century, most countries converted to the fiat money system, in which banknotes are no more backed by metals. The value of our money, today, is solely based on our trust in the system.

Moving Forward

What will be the next monetary system? Will we move to all electronic money, with no physical banknotes?

What is money for? Money is a mean to acquire goods and services meant to satisfy our basic needs, such as food and home. Any excess is used on luxuries, though some people cannot satisfy their most basic needs.

We have the technology to produce food in sufficient quantity to feed the entire world, with little or no intervention from humans. We do not need to work to produce our food, therefore we should not pay for it. Yet, we let people die of starvation because they do not have money.

With our technological advancements in computers and robotic, we could computerize and automate most of what we do that we are getting paid for. We do not need to work to produce most goods and services, and therefore everything should be produced and provided for free. Money has become irrelevant.

Of course, not everything can be done without any human intervention. Those machines that would produce goods for us would still need to be designed by us. They would need to be watched and maintained by us. We would need to invent new things and design them. Who would perform these tasks if there is no money to pay them?

There is a false myth that money is the sole incentive to get people to work. If everything was suddenly free, would people would just sit their ass off and do nothing? Sure, some people would, and actually a lot of people do just that right now. But many people would still want to work, because the work that would now be required would be for the benefice of the community, and by extension, for themselves.

A lot of us currently do a job solely for the money – I don’t dislike my job, but I wouldn’t do it if I didn’t have to. We are currently stuck in a system in which we need to work in order to get money, which we need in order to eat. However, a lot of people currently do something they love, and which they would do even without money. I currently cannot do what I love because I do not have the money to do it. If money wasn’t an issue, I would still work, but I would do something totally different. I wouldn’t work eight hours a day, five days a week, but I would work, and do something I like which is beneficial to my community.

Without money, wars would be irrelevant. Every one in the world would have access to what they need, and thus wouldn’t have to fight for it. Crimes would be a thing of the past, as most crimes are done for money – stealing, prostitution, drug traffic. Corruption would be irrelevant, as our elected representatives would have nothing to gain, and would really be there to do what we really need them to do.

Innovation and progress aren’t driven by money. If anything, they are slowed down by money. Many inventions, some which could be very useful, never get to be produced because of lack of profitability. Many researchers cannot complete projects because of lack of fund. Many innovations are delayed so to create new and better versions of everything year after year, so you always want a new one – think of the automotive industry.

There is currently no incentive to produce high quality goods which are earth friendly. There is no point in increasing the quality of goods as you wouldn’t need to buy them again. Replaceable parts are a thing of the past. Things cannot be fixed, you must buy anew. We do not have infinite resources, yet we act as such.

Without money, it would be in our best interest to produce high quality and durable goods, which we could fix, and spare our resources. We would not need as much energy since we would produce less – not even mentioning that most of us wouldn’t have to travel long distances to work.

There is no reason for the use of a monetary system anymore. Nobody could possibly oppose a moneyless world, except the 1% of the population who owns 40% of the money. A world without money would put everyone at equality, as everyone could get anything they need or want. It would cause peace between all the humans. We could work together to preserve our planet.

Let’s work together

We are currently stuck in a system. We cannot possibly get out of this system overnight. We could get out of it if we work together to achieve that goal, or we could wait for the system to fail.

moneyless-featureOur monetary system is flawed. It crashed before and it will crash again. Our system is based on debt. Every single unit of your currency is a debt to somebody. Even if it’s not your own debt, somebody had to get into debt in order to give you the money that you own. You had to borrow money to buy your house with a contractor built using borrowed money. Your boss pays you a salary using money which was borrowed for expansion of the company. Your government builds public infrastructures using money borrowed from either banks or other countries, which they are unable to pay back, and thus accumulate interests. They need to print more money, which they borrow, in order to pay back their debts, in effect creating money out of thin air. Every single unit of your local currency is a debt.

In the sixties, an average family could buy a car. Today, it’s an investment on eight years. Even your fridge and stove are being paid over years. This is caused by inflation, itself a result of the ever increasing flow of money in circulation.

Inflation causes financial crises, which causes people to lose their job and declare bankruptcy. Bankruptcy is a by-product of our system, a necessary inconvenience for it to work. A common conception is that financial crises are recurrent events which we recover from each time. In fact, we never recover from any crisis. Economies stabilize again after each crisis, but our money is worth a little less each time. After each crisis, we can buy a little less than before. This system is deemed to crash, and it will. The question is when, not if. We are so dependent on this system that we cannot imagine the consequences.

We do not have to wait for the system to crash though. We could start to develop the new system now, so it’s ready in time to replace the current one. Let’s work together to apply the technology to set up a sustainable food production, and let everyone eat for free. From that point on, the new system will settle by itself, as the old one will become irrelevant.

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2 comments on “Moneyless World

  1. sledpress
    November 28, 2013

    I’ve often wondered why, in a world that seems capable of generating an infinite amount of goods, no one has arranged for people to just *eat* for free. Not foie gras or Cordon Bleu but just decent sustaining food.

    • Tom Duhamel
      November 28, 2013

      Foie gras should be illegal. But at least there is one person who agrees with me.

      I hurried to have this posted this week, I didn’t want to skip a week again. I got it one day late and was glad I was able to do it. But I sure had forgotten about what day this is. Worst performing post on its first day. I should have skipped a week after all lol

      Thanks for commenting. I have like 10 posts to read on your blog, I must find some time to catch up. So much things to do, so little time. Maybe I should pick a lighter subject for next week and enjoy a little more time for myself.

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This entry was posted on November 27, 2013 by in History, Society and tagged , , , , , .
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