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The Way it Could Be
By Marc Gauvin
"...Why would one conclude that using money under its current misrepresentation is a valid means to ensure against abuse when misrepresentation is itself a legal offence as laid out in You Have Been Served? Why would one conclude that other extant social mechanisms are insufficient, making the coercive property of money's misrepresentation a requirement for society to function in a satisfactory way, when doing so necessarily invalidates money as a valid reference of value according to the logic and requirements of the science of measure?"
Referring to the day-to-day operation of a Passive money system as required by Resolution 2 of the MSTA Resolutions, where money is formally defined as solely a record/measure of value and strictly operated on accordingly, Micheal Haines on Bret Scott's Substack asks:
"Can you describe how a person would set up a new business with new suppliers, including new logistics suppliers, new premises, new power and water, new staff, and new customers? Given the person has no 'units' to start with?"
First, all can open accounts under the definition and specification of Passive money as laid out on pages 8-11 of "A Systems Engineering Approach to Formal Monetary and Financial Stability Without the Vagaries of “Austerity”. Secondly, all participants of any new activity will be required to satisfy all legal and professional criteria, agreements and certifications in order to operate in most areas that carry social liability or require expertise. Next, the creation of a proposed enterprise will need the appropriate ratification of by all local, social, urban and environmental norms, contracts and expertise, as well as by the individual suppliers and participants of any related value chains. All this will be undertaken without any "supply of money" being required to "enable" economic enterprise on criteria exogenous to real world needs and requirements, yet any sums will be recorded in participant accounts immediately and as required for all (collectively) condoned, governed and ratified transactions.
Without money acting as a universal enabling trump card as is commonly the case today under money’s misrepresentation, common systemic corruption experienced by all at all levels, is made impossible. Instead, economic activity is enabled as desired according to the knowledge and expertise of the participants themselves, providing a most comprehensive and rigorous governance on the basis of the best available real world expertise of the needs and requirements of the activities themselves as opposed to the imperatives and vagaries of our current dysfunctional and inherently unstable haphazardly defined money system.
Governance will not only manifest at the level of formal legal and professional requirements but also at the level of social mores and cultural responsibility, in communities where individuals are empowered free of the vagaries of money’s misrepresentation.
Why would one conclude that using money under its current misrepresentation is a valid means to ensure against abuse when misrepresentation is itself a legal offence as laid out in You Have Been Served? Why would one conclude that other extant social mechanisms are insufficient, making the coercive property of money's misrepresentation a requirement for society to function in a satisfactory way, when doing so necessarily invalidates money as a valid reference of value according to the logic and requirements of the science of measure?
We can prove money's misrepresentation, how it creates systemic instability and how when agents at all levels of society rich and poor unwittingly abide by the imperatives of that misrepresentation, the dynamics of said instability become a "hidden hand" governing society beyond the will of anyone no matter their station in life. Thus, we are all prone to increasingly assume and accept what otherwise most all would consider unconscionable. If all this is true, why would we conclude that freeing the many other extant mechanisms for social control and governance from the vagaries of such systemic instability, would not lead to a vast improvement for all?
Who or what decides?
The current system is based on a misrepresentation, a primary cause of the ills that the system bills itself as its purpose to address. Since the measure of value is corrupted by the system itself, all other calculations in terms of it are also invalidated. So, correcting the misrepresentation is in and of itself a bonified solution.
"Money" as a mere record of value cannot be used as a control of economic activity because the moment it is used that way, the function of measure of value becomes biased and the system is rendered unstable and therefore unmanageable for the purpose of valid measure.
With a Passive system, we are guaranteed that the system itself cannot be responsible for what it registers but can only the activity it records can. Since, users expect reciprocation of their value from the system as a whole, the real concern is the risk of system wide catastrophic non reciprocation of value in general endemic of systems governed under money's misrepresentation. Control of risk cannot be reduced to merely distinguishing negative balances against positive ones, but rather identifying unstable activity that generates both "excessive" negative and positive balances. In this regard and should there be any marked increase of unreciprocated value in the system, a Passive system offers two mechanisms that the current system cannot, because its data is categorically invalid see (Risk Without Austerity):
- Reduce type B transactions. (Negative or zero buys from positive or zero (increases system balance)
- Increase type A transactions. (Positive buys from negative (reduces system balance)
Otherswise, what people can or cannot "afford" beyond fully adequate and quality minimums for all, can only be evaluated and awarded according to non monetary merits by a society free of money's misrepresentation.
Q&A
1) What does it mean to have a balance?
A balance simply represents a measure of value given or received in the form of “goods and services” pending future reciprocation of “goods and services” of commensurate value.
2) Why bother keeping records?
To provide a valid measure of the relative value of a broad array of goods and services particularly those goods and services whose value is otherwise non divisible (non fungible).
3) Are there consequences flowing from the record?
The first consequence is the provision of a valid measure facilitating the evaluation of a broad array of goods and services over time, particularly non fungible goods/services. Secondly, identification of the origin and destination of value over time and overall performance and responsiveness of different agents’ and their productivity. Thirdly, the ability to optimise resource use and managing risk in general. Actuarial calculations will provide the means of identifying which transactions are potentially problematic given the circumstances and profiles of the parties involved.
4) Does every transaction have to be assessed?
All transactions are assessed by at least the parties to the transactions, most all of whom are knowledgeable of the exact purpose and utility of keeping value measure. All have access to common knowledge and data (e.g. the system balance) as well as particular information (e.g. participants’ balances and other data), in conjunction with relevant specialised knowledge and expertise of the requirements and effects of a responsible use of the corresponding products and services. Finally and depending on the circumstances of different goods and services with different associated risks, more elaborate and formal actuarial studies may be required to determine whether a particular transaction should or needs to take place or not.
Note: the financial risk component of actuarial calculations will be greatly reduced compared to today under money’s misrepresentation where finance itself produces the lion’s share of risk.
5) Is there a 'cumulative' assessment over time to assess risks based on past behaviour?
All with a history will be assessed by their peers to some or other degree, many transactions will require objective assessment and proof of past capabilities, successes and failures.
6) How does society guard against fraud?
By eliminating the misrepresentation of money and its nefarious consequences financial fraud as is known today, will carry far less risk. Nonetheless, all stakeholders (e.g. Central Bank, associated banking or credit institutions, public administrators and interested parties etc.) will be issued with periodic reports, audits and statements as required.
7) What are the consequences if a person fails to honour their commitments?
Depending on the extent, causes, consequences to others, presence or not of malfeasance or fraud, etc., the consequences may be any of a broad array of legal and social measures to redistribute assets when possible and take preventative measures.
8) What is the basis for assessing risk? Is it income and/or assets based and/or history/character?
Operations research (OR) has proven highly successful in decision making on the basis of a wide range of categories of risk, e.g. risk of producing certain products vs others, enterprise failure, reliability, environmental consequences, rates of depreciation, force majeur. etc..
Note: In a system where money only represents a record/measure of the value of goods and services pending reciprocation oscillations of balances around a mean value of zero are clearly more efficient than those that oscillate around a non zero mean. Also, value measure on account is only of what is pending reciprocation not of all free-hold assets producers may accumulate in exchange for their added value (work and knowledge).
9) Who does these calculations?
Those trained in OR and actuarial science (simplified by eliminating compounding in finance)
10) Who pays them to do the calculations?
Like any good/service transacted there is a provider and a recipient.
11) How is their pay calculated? Is it dependent upon the 'size' of the transaction?
Like any other transaction of goods or services, it is based on a measure of value of the service itself not that of the value for which the service is provided.
12) Who checks that actual experience conforms to their calculations over time?
Everyone will be able to evaluate the goodness of any service given its specification and warranty.
13) How is this check done?
Evaluating experience vs specification and warranty.
14) Who pays for the check?
Like any good/service transacted the agreed value is summed to the providers balance and subtracted from the recipient balance.
15) How is the cost of the check calculated?
Like any other goods or services, it is based on the cost and value of providing the service.
16) What if actual experience results in a 'shortfall' vs the assessed risk?
If a good/service fails, then the previous answer 7) applies.
17) Who determines there is a shortfall, and the size of the shortfall?
Depending on the failure either it is obviously assessed by most anyone and if required expert witnesses and a court of law may be required.
18) What happens when it is determined that the shortfall can never be recovered
Value lost is a fact of life and only compensated by doing things better in the future using valid measures.
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