13 October 2013

An Alternate Form of Money

One may speculate on alternate forms of money, such as electricity. Electricity is a primary societal need. Everybody is wired to electricity. To not have electricity would severely disrupt society. The intrinsic value of an electrical unit, measured in kilowatt-hours, is uniform and measurable. One root of all comparative valuation could be a kilowatt-hour, kWh. A 100 Watt bulb on for 10 hours is 1 kWh.

Since the storage capacity of electricity is still negligible, the extraction rate of electricity equals its consumption rate. For the most part, what’s produced is consumed immediately. Though the extraction rate and the consumption rate may increase, they increase proportionately. As long as the storage capacity of electricity is negligible, the result is a zero growth rate of money. A zero growth rate does not facilitate the application of interest. Society will restructure itself to accommodate a zero growth form of money.

The relationship of a kilowatt-hour with its energy source would become primary societal knowledge. Oil, natural gas, coal, nuclear, and hydro are the predominate sources of energy used in the production of electricity. Solar, wind, and bio are still ancillary energy sources. Oil, natural gas, and coal are finite resources with extremely low replenishment rates. To ‘save money’ would be to save electricity, perhaps enough to eliminate the need for nuclear and foreign fossil fuels immediately.

The immediate source of money would be the utility serving the local power grid. In California, PG&E would be the utility for Northern California and Socal Edison would be the utility for Southern California. The production of electricity comes from many sources contracted with the utility; however, the distribution of electricity through the grid is centralized and controlled by the utility. The management of money would go from global to regional while still maintaining a global form of money. Eventually and perhaps quickly, more independent ways to produce electricity would be creatively found.

The logistical details of how an actual transaction occurs using electricity as a form of money becomes the project deliverable. It takes a lot of people to run the utility and they have needs like everyone else i.e., the basis of trade with others.

Money by Edwin Walter Kemmerer, Princeton, 1935
Money is a comparatively modern device. Our earliest record of coin dates back to the eleventh century before Christ in China, although at that time man had been on the earth probably a million or more years. Goods were exchanged long before money existed, and the origin of exchange was in gifts. One would make a present to another in the hope of obtaining a present in return. Our modern customs in regard to Christmas and birthday presents are reminiscent of these primitive forms of exchange.

Mammon by Robert Graves, Annual Oration, London School of Economics & Political Science, 1963
Let us go back farther in ancient history, to the idea of barter; and beyond that to the idea of obligatory gift-exchanges; and beyond that, to the still purer idea of unconditional gift. What we now call ‘finance’ is, I hold, an intellectual perversion of what began as warm human love.

A People’s History of the United States by Howard Zinn
Everyone could share the routine but necessary jobs for a few hours a day, and leave most of the time free for enjoyment, creativity, labors of love, and yet produce enough for an equal and ample distribution of goods.

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