Other Money Perspectives

The Form of Money

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, 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.

Alternate Forms of Money

The Form of Money

In the looming eventuality beyond Legal Tender, commodities will always be front runners as dominant forms of money. As mentioned in Money Defined, which commodity transforms into or out of the category of ‘money’ is a Darwinian selection process determined by the Market. Precious metals always have, and always will, have roles as forms of money, as do most other commodities.

With that said, there is one commodity that is recent in the history of humans, and that’s electricity. Electricity is now a primary societal need; its importance is obvious. To not have electricity is, and would be, severely disruptive.

The intrinsic value of an electrical unit, measured in kilowatt-hours (kWh), is uniform and measurable. One root of all comparative valuation could be a kilowatt-hour, kWh. A 100 Watt light bulb on for 10 hours is 1 kWh. 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 generation of electricity. Solar, wind, bio, and storage are rapidly emerging energy sources. To ‘save money’ would be to save electricity; perhaps enough to rapidly eliminate the need for carbon-based generation.

The utility industry is currently undergoing an enormous change. The old utility model has large concentrated facilities to generate electricity (coal, nuclear, natural gas) and distributes that electricity through the grid, a one way flow. The new emerging model has many electrical sources of generation (solar, wind, bio, storage), which tend to be smaller in generation and more geographically dispersed.

The challenge is to create macro and micro grids that can integrate all the energy technologies, balance generation with demand, be dependent and resilient, and bill appropriately. In essence, the grid becomes a clearinghouse for kWh exchange, an electrical form of money, comparative with all other forms of money.

The logistical details of how an actual transaction occurs using the kWh as a form of money becomes the project deliverable. It takes a lot of people to operate and maintain the grid, and they have needs like everyone else, the basis of trade with others, the Market.

Case Against Large Fast Food Franchises

Franchise (Business Dictionary):

Arrangement where one party (the franchiser) grants another party (the franchisee) the right to use its trademark or tradename as well as certain business systems and processes, to produce and market a good or service according to certain specifications. The franchisee usually pays a one-time franchise fee plus a percentage of sales revenue as royalty, and gains (1) immediate name recognition, (2) tried and tested products, (3) standard building design and décor, (4) detailed techniques in running and promoting the business, (5) training of employees, and (6) ongoing help in promoting and upgrading of the products.

Franchises are an easy way for an investor to have ownership rights without the responsibility of actually managing. Franchising is the business structure for large fast food companies like McDonalds, Burger King, Starbucks, Taco Bell, Subway, Pizza Hut, KFC, etc. McDonald’s is the largest fast food chain in the world with 35,000 outlets across 119 countries, employing 1.7 million people. Starbucks is now the largest coffee company in the world with 23,000 stores across 64 countries. From a technological or logistical perspective, there is no reason these companies should have such domination over flipping burgers, making a sandwich, and brewing a cup of coffee.

In 19^th century America, most businesses were locally owned and managed by the same people. As sole proprietorships, profits would stay with the owners, providing a livable income. In a food franchise, ownership is separate and absent from the management/operations of the food establishment. Operators (cooks) are reduced to a non-livable minimum wage and the local manager doesn’t fare much better. Profits are skimmed to support an absentee owner who has no real interest in the local community nor in the managing/operating of the food establishment. The franchisee pays royalties to the corporation to govern that aspect. The food is engineered, standardized, unhealthy, but cheap. Culinary creativity is nonexistent at the establishment level.

The CEO of McDonald’s has a yearly salary of $16M with generous salaries cascading through the executive leadership. That’s a lot of burgers. Each franchise can cost $2-5$MM. A local burger joint should not cost millions to start, but somehow it does and it’s still profitable. What could have been a local establishment that supports a livable income for sole proprietorships is an establishment that reduces cooks to minimum wage with absentee owners skimming all the profits, skewing wealth to the few, wealth that could have gone to the many.

Today, the preponderance of fast food franchises are owned by LLCs, a financial vehicle that obscures ownership and liabilities. Absentee owners have no concern for the local community nor for the workers. They just want a rate of return. Many LLCs are of foreign origin, the entry price to gain citizenship in America.

Merely taxing the wealthy will not fix the problem of skewed wealth. Changing the financial vehicles that propagate skewed ownership will fix the problem of skewed wealth. Limiting the proliferation of fast food franchises is an easy first step to fixing the problem of skewed wealth.