Money is a Measure. It has no intrinsic value. But, we have turned money into a thing of value by defining it to have value. Making it have value is expensive. There is good reason to believe that the cost of supporting a token of money is more than it is worth. If we continue as we are our standard of living as measured by goods and services will decrease.
It hasn’t appeared to drop because we consume natural sources of value and do not replace them.
If we stop treating money as a thing of value then we reduce the overheads to operate the financial system by at least 90%. Money markets will still exist but become less important and lower cost. Insurance will become less important and lower cost. Tax Havens will not save users from taxes.
How do we make it happen?
We can phase out money tokens with value by slowly replacing it with money tokens without value. We do this by allowing anyone to create money tokens and use them if they can convince others that tokens have value. Rather than leaving it up to society to agree to protect the value of money tokens we leave it up to each entity.
We do this slowly by stopping repaying debts with money that has value. We do this by repaying debts with goods and services. Any quick calculation shows that transactions using money tokens that have no value cost less.
What will be the effect on the economy?
There will be an increase in living standards as people move from jobs that protect the value of money tokens to jobs where they produce goods and services that others want. Countries will introduce a basic income, and we will see a more even distribution of wealth. But, we will still have rich people, and we will still have poor people.
To the population, everyday commercial activity will not change. We will see a stabilising of prices. We will notice a shift in the reporting of economic activity. The greatest disruption will be to the profession of economics. What economists do will change. We will notice the disappearance of hedge funds, and we will see shifts in the way we insure things. We will see an end to inflation of money. Goods and services will still have price changes and markets, except money markets, will continue, but with less volatility.
Central Banks will retain the role of controlling how much money the government creates. But, its primary job will be to ensure that money inflation is zero.
Won’t it be expensive?
The savings are so significant that the cost of the change is quickly absorbed. The savings are such that disrupted industries can have adequate compensation. We can afford to pay coal companies to stop mining coal. We can afford to preserve bio-diversity. We can make a sustainable world.