I just had an unbelievably bad idea for an Inside the Actor’s Studio-style interview show. “Today on In Detail, we’ll be talking to the Gross National Product. So, GNP, what made you decide that you wanted to be an economic metric?”
Sorry about that, too much tea and not enough sleep. I promise that is not what this series is about. Instead, it’s a chance to go through some of the underlying elements of technosocialism that have been touched on in other essays but not explained fully. Today we’re going to be covering the ideas of Contribution and Consumption, the role they play in a technosocialist society, and how they differ from a currency-based model.
When people ask me what I’m working on, my usual answer is “a post-currency social and economic model.” This generally surprises those who assumed that it was my diary, or possibly fan-fiction poetry, and they tend to assume that I’m joking. But even for those prepared to accept the statement at face value, it tends to be a confusing one. Currency is deeply engrained in our culture as the only possible way an economy can flow, and the only alternative people can think of is the barter system, which is a pre-currency rather than a post-currency system. So let’s start our discussion with a brief overview of the history and role of currency in our current economic system.
Currency has evolved a number of times in different parts of the world, but it tends to start at one of two roots: grain or shiny things. As surplus agriculture developed and towns as we know them began to form, graneries were built to protect grain stores from moisture, mice, and other threats. Rather than trying to track whose wheat was whose, these granaries issued representative tokens. If you dropped off five pounds of wheat, you got tokens entitling you to pick five pounds of wheat back up. Because grains were central to the food supply, the tokens could often traded to the emerging non-farming artisan class in exchange for goods more easily than farmers could carry around grain for barter, and so they became a currency. The idea of a currency backed by wheat or rice might seem quaint to today’s modern American, but it actually makes quite a lot of sense. It just strikes us as odd because our currency evolved from a system based on shiny things.
The key to a shiny-things currency was rarity and beauty. A particular metal or type of shell had to be available in an area but fairly rare or labor intensive to collect. It would become highly prized as a decoration and sign of status, and something which everyone in the community would want, the same way they would all want grain in a grain-based economy. The universal desire for the shiny thing would make it universally barterable, and from there it would become a currency. In the case of metals, the minting of coins was started to provide guarentees of the purity and quantity of the metal being traded, and from there cultures often switched to coins and paper money backed by the metal rather than made of the metal itself.
So what is currency, really? Why would I as a merchant accept a piece of shiny metal (or these days, a series of electronic digits which represent a promise of a piece of paper which is no longer connected even to the shiny metal) in exchange for tangible, useful goods? My favorite explanation of this actually comes from Terry Pratchett’s Discworld series. One of the main characters has been placed in charge of the Royal Mint and is wondering just what makes a dollar coin worth a dollar. “It was the city, he realized. The city said, in exchange for that dollar we will give you all these things. The value wasn’t in the coin, or even in the gold that backed it. It was in the potential of the city itself.” When I sell you a hat for $20, what I am really getting from you is the right to request $20 worth of goods and services from other members of society.
What technosocialism attempts to do is erase this last illusion of individual-to-individual exchange, and instead focus on the exchange between the individual and society. Because if I’ve made a hat worth $20, I don’t actually care whether I’ve gotten $20 from the person now wearing the hat. It might have been a gift for someone else. All I care about is being able to now $20 worth of food from the grocery store, or $20 worth of electricity from the electric company. In our current system, that means that the hat needs to go to someone who currently has $20 they’re willing to part with, which is why drops in employment tend to spiral into larger recessions. Because technosocialism disconnects the two, it provides a more stable demand and thus a more stable economy.
So let’s start at the beginning. Just what are Contribution and Consumption? Basically, Contribution is a measure of the benefit you have given to society. Goods you have produced, services you have performed, etc.. Consumption is a measure of what you have taken from society, either in the form of physical goods or in the labor of others. What makes this model different from a currency-based model is that there are times when Contribution can occur without Consumption, and vice-versa. When someone reads a book, the author of that book has aided in the education or entertainment of that citizen, an inarguable Contribution to society. But the person reading the book isn’t taking anything away from society. There’s no limit on the number of people who can read the book, and it doesn’t take the author any longer to write if one more person reads it. No consumption takes place.
Those of you familar with economics in a more traditional currency-based approach are probably yelling something about inflation right now. There are two reasons not to. Firstly, because essays can’t hear you and yelling at them will make people think that you are insane. Secondly, because inflation is something that happens to currency, and this is not a currency-based system. It’s easy to slip into a familiar mindset and imagine a Contribution account where you earn Contribution credits and then spend them. But that’s not the case. Consumption and Contribution scores exist completely indepentently, and what matters in terms of buying power is the ratio between the two. A person’s Contribution or Consumption score is not a balance that goes up or down, but a lifetime tally of everything that person has consumed from or contributed to society.
So how are Contribution and Consumption values for a given item or service determined? Through a free market. This is the part where people tend to get really confused, if they weren’t already. If you’ve eliminated currency, and you’ve eliminated the idea of the individual-to-individual exchange, how can you have a free market? In some ways, more easily. We’ve already looked in an earlier essay at the idea of a single market being able to deal more directly with supply and demand, so now let’s look in a bit more detail at the mechanisms behind that. Fred, our individual craftsman of yesterchapter, has made a number of hats. Bill is one of a number of citizens who would like to have a hat. They both enter this information into the Market. Fred takes pictures of each hat, enters in the sizing information for each, is given the information that the materials and labor involved in the hat set the starting value of the hat at 20cnt, and officially marks them as available.
Now it’s Bill’s turn. He goes into the Market and opens the Clothing>Accessories>Hats section. He further refines his search by requiring the tags “flat cap” and “wool”, sets the color to grey, and enters his head size. Now, depending on how unusual that combination of factors is, he may or may not get any results. If he doesn’t, he has the option of expanding his search to the regional or national system, or submitting a Request into the Market describing the hat he’s looking for. In this case, however, he has several hats to choose from, including one of Fred’s. Each hat is listed with pictures, information about sizing and materials, and reviews of products made by the same artisan/manufacturor. Each also lists the Consumption value of the hat, which is based on the current market value of the various supplies used to make the hat, as well as for the labor required. A surge in demand for wool suits, for example, would also raise the Consumption value of hats made from the same wool cloth. And demand for wool knitting yarn would affect the Consumption Value of both hats and suits, since they use the same base material. This initial Consumption Value may go up if demand for the item in question is particularly high, but more frequently it will go down if the item is left unclaimed for a lengthy period of time.
So, after reviewing all of the hats on offer, Bill decides that he wants the hat made by Fred. He puts in his request for the hat and goes off to do something else. Meanwhile, Steve puts in a request for the same hat. (You can’t trust imaginary guitarists. They sneak up at the last minute.) There’s only one hat, so now the system has to decide who the hat goes to. In general, auctions are a good way to set values, but they give a definite advantage to the richer party. Thus, the auction mechanism at the heart of the Market is not based on straight amounts, it works through the citizens’ ratios. Let’s say that Bill’s residual Contribution from his various factory ventures, added to his direct Contribution, puts his Contribution score at 400,000Cnt and his reasonably large house, nice clothes, etc. puts his Consumption score at 350,000Cns. His C/C ratio is therefore 1.14285 and his Buffer is 50k. Steve, by contrast, lives far more modestly. His work as a laborer and his royalties as a guitarist only add up to a Contribution score of 50,000. On the other hand, he has spent most of his adult life living in baseline apartments and living as cheaply as he can. His Consumption score is only 38,000, making his ratio 1.31579 and his Buffer 12k.
When Bill put in his request for the hat, he was told that the initial Consumption value of the hat, 25Cns, would lower his ratio by .000074. He was then asked how much of his ratio he was willing to bid. He entered 0.00012. When Steve entered his request, he couldn’t see Bill’s request. He was only told that the initial Consumption value of 25Csv would lower his ratio by .00086, and asked how much ratio he was willing to spend. Being a bit of a cheapskate, he leaves it at the minimum bid.
Bidding stays open for 24 hours after the item is listed. In this case, due to the influence of an omnipotent narrator who wants to get on with the story, no one else bids. Two bids need to be identified here. The winning bid is determined by the ratio changes. Steve’s bid of .00086 is clearly higher than Bill’s of .00012. Steve gets the hat, and his Consumption score is increased to 38,025. But Fred’s Contribution earning for the hat hasn’t been determined yet, and it isn’t based on the winning bid, but the highest bid. After all, Bill’s bid was higher in actual Csv terms. By bidding a ratio change of .00012, he was indicated a willingness to have 38.942 Csv added to his consumption score. In a traditional individual-to-individual exchange economy, Fred would have beeen able to get the equivalent of 38.942Csv in currency from Bill. And so the Contribution that he earns for making the hat and putting it into the Market is the highest bid, and his Contribution is increased by 38.942. Let’s look at who is advantaged and disadvantaged in this ratio-as-buying-power model. One the one hand, those working with lower total C/C scores have a definite advantage when it comes to winning an individual item. Their actual Csv charge is lower to make the same ratio bid. On the other hand, this means that even relatively minor purchases can eat up significant amounts of their ratio score. Steve won the hat over Bill because the 25Csv was equivalent to a .00086 ratio change, but conversely that meant that he could not bid less than .00086. Bill will be able to bid on other hats, and is likely to eventually get one at close to 25Csv, which will have a much smaller effect on his ratio than it did on Steve’s.
Another advantage of the lifetime ratio model is that it includes a built-in retirement system. Someone who works to the age of 65 while maintaining a good ratio will probably have quite high scores in both Contribution and Consumption. Even Steve with his moderate lifestyle would likely reach a score of 250,000/190,000 by the time he’s 65. At that point, the “inertia” of a ratio based on such large numbers would mean that he could continue a moderate amount of consumption for many years even without earning additional Contribution before his ratio was seriously affected. There’ll be another essay about seniors and other vulnerable members of society later, but I thought I’d mention it while I’m here.
The last thing I’d like to bring up before ending the essay is that I know this sounds overly complicated and confusing. At face value, it certainly seems harder than the current money-for-goods exchange. But that current model is actually far more complex than is generally believed. The merchant sets his his price based on factors ranging from oil prices to the average income in the area, and citizens’ ability to buy the goods depends on unemployment, real estate prices, and the general availability of credit. It’s at least as complex as the Market I’m proposing, but the complexity is hidden away and only the financially educated few can begin to unravel how it works. Every algorithm of the Technosocialist Market is completely transparent, to be understood and even fine-tuned by the general citizenry as needed. And at the same time, the user interface hides the calculations involved from users who are not interested in them, making the Market as easy to use as any modern e-commerce website.