How does our tax system relate to this issue. Is it appropriate for the government to use the tax system to represent us in supporting the welfare of our brothers? If so, at what level of government should this occur? What services or level of support are to be included in welfare?
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What should our relationship be toward property, the earth and its natural resources?
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How should phantom wealth, which is not payable, be unwound?
Lessons for action
The problem at hand is succinctly described by Bernard Lietaer in the following. xx
Aligning Moral and Economic IncentivesThere are three main ways to induce nonspontaneous behavior patterns: moral pressure, coercion, and economic incentives. For example, recycling glass bottles can be promoted by education, by regulations, or by incorporating a refundable deposit in the purchase price. A combination of all three incentives is obviously the most effective strategy.
When these incentives conflict, problems will arise. For instance, when there is an economic incentive to do something a regulation or law prohibits, we need costly and permanent enforcement systems. Even in the presence of such enforcement systems we expect . . imaginative forms of cheating to occur. More evident are cases where moral pressure is supposed to overrule economic interests. . . However, this moral pressure is diametrically opposed to the concept of receiving interest on money, which provides a built-in incentive to hoard currency. Whenever there are such structural contradictions many people are unable to afford, or simply do not care enough, to follow the moral advice.
It is possible, however, to design a coherent and operational currency system so that this apparent structural contradiction disappears. In other words, by questioning some traditional implicit assumptions, we can realign the moral and economic incentives so that they are in harmony. (Emphasis added)
Lietaer gives examples of how money worked, and still works in a number of settings. xxi An important example is ancient Egypt, where there were two kinds of money. For exchanges outside the country, precious metals were used. For internal exchange, grain was the commodity that created the currency.
The system worked as follows: The government had grain storage bins. If a farmer had excess grain he took it to the government bin, and was given a receipt, carved on a piece of soft fired clay, that gave the date and amount of grain received. This clay receipt circulated as money. Whoever came back to turn in the clay receipt for grain received less, depending on the storage time. The time charge was used to pay for the costs of storage. Unlike the Greek and Roman empires that used interest bearing money, the Egyptian empire continued for more than 1,000 years with this money system, and ended only after the Romans took over and introduced their currency, which was similar in its function to ours.
We see here a historical use of a demurrage currency, an idea reinvented by Silvio Gesell about a hundred years ago. xxii As a side note, John Maynard Keynes noted that Gesell had more of value to say about money than Marx. xxiii Keynes' proposal for a post WW II world monetary order took advantage of a form of demurrage, but was sidelined by the bankers of the winning countries.
The issue at hand is to design a kind of money that is stable over time, and is consistent in its values with the values of trust, justice, democracy, and sustainability/resilience. With design criteria in hand, we can consider experiments to transition in that direction.
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