Introductory Speech on Open Fair Credit System

[Teddie Goldenberg]

This is imagined as a short speech, something I'd imagine would go
along to a multimedia presentation, like a TED talk.

Introduction

Let me tell you about a possible civilization of the future.

The civilization of the future is energy-efficient. The civilization
of the future has zero net emissions. The civilization of the future
still enjoys air-conditioning, the freedom of the highway, and 3D
movies at the theater in surround sound.
In the world that is coming, there will be all the things we enjoy
today, but better. Our food will be grown closer to us, be more ripe
when we eat it, and taste better. Our houses will take less energy to
heat and cool, and sometimes, make more energy than they consume. We
will live closer to where we work, enjoy what we do, and retire at a
comfortable age. Children will want to go to school, and everyone will
be able to have the education they desire. The best health care will
be available for everyone.
Everyone can wear fashionable clothes. Anyone can go on vacation
wherever they want. Anyone can have smart phones, smart cars, and
smart kids.


I will now describe the system of credit that this future
civilization uses, and which provides the economic foundation of its
sustainable, free-market system.


The future world credit system is composed of one thing: information.
There are no pieces of paper or stacks of gold that are part of it. It
is also not composed of promises, speculation, or blind faith. It is
purely information, information that describes work done by people.
And because each parcel of information – a description of work done –
is associated with one person and one person only, it becomes
synonymous with identity.

Each person is a sum of their history.

Let's take a closer look at this credit system of the future.

The Credit System of the Future

Information is only useful if it is true. The closer the information
reflects reality, the more useful it is. Therefore, this Credit System
only records true things. Speculative, or subjective values are not
counted. At its very core, the values can be broken down into three,
measurable categories:

Time
Energy
Objects

It can be argued that Energy is a physical object, but we will see
that the translation between Energy and an object varies considerably.
Also, it's impossible to make a standard conversion rate between time
and energy. Same goes for time and objects. But an individual object
can be quantified in terms of time and energy, or other objects (such
as raw materials) that go into making, processing, or transporting
them.

So each individual object has a negative amount of energy and time
associated with it, and the person who owns that object inherits that
negative value on their personal balance-sheet. What we commonly refer
to as a “debit.” When that object is passed to someone else, that
debit is also passed on. This transaction is what we refer to today as
a “sale.” But since the values involved are only objectively
determined quantities of time and energy, there is no “profit.”

So where does all the wealth of this future civilization come from,
if there is no profit, no interest, and no taxes, for that matter? How
does this future civilization sustain advanced universities, research
labs, entertainment media, firefighters, garbage services, high-tech
high-rises, and cuttting-edge hospitals that are open to anyone?

The short answer is the Sun. The long answer is that a surplus of
productivity and energy production allows civilization to develop
beyond the agrarian stage, no matter how it is distributed. How is
that different from the monetary system we utilize today, at least in
terms of the end result?

Well, the civilization of the future has all these first-world
benefits, but none of the thirld-world problems: hunger, water
shortages, overpopulation, energy shortages, and pollution. How do
they do it? By keeping track of everything.

Keeping Track of Everything

We already keep track of everything, or at least, have a good guess
about everything that goes on in modern civilization. Some people make
careers of trying to hide, obscure, and destroy information.
Information such as the amount of cyanide spilled into rivers from a
gold mine after a flood. The future civilization has no quarter for
information-hiders: to be a part of the credit system you have to be
completely transparent.

Thus, every product will reveal all information about its production:
how much steel, plastic, and other elements went into making a
toaster; how much time was spent assembling it by hand; how much
energy was consumed for its manufacture; and how many pollutants were
released into the atmosphere or groundwater because of all that
activity.

That means when you purchase a toaster, you also acquire all the
debits to society that were incurred with the creation of that
toaster: the time, the energy, and raw materials used, and the
pollutants. You will be able to tell instantly on your personal
account how many tons of CO2 were released in the atmosphere from all
the things you own, for example.

Because the sequestering of CO2 and the cleanup of other pollutants
can be priced at any moment, in terms of time and energy, the overall
debit to your account will change. If the cost of sequestering CO2
goes down over the years, then the debit to your account from all your
properties' CO2 emissions will also go down.

So right there is the incentive to not only consume less-polluting or
zero-polluting products, but to also fund the cleanup of pollution.
But how do you fund projects or services? You can't give your credits
to anyone – it's just a collection of information specifically about
you, and doesn't apply to anyone else.

The Funding of Social Improvements

This is where a mixture of democracy and the free market is made
apparent. As a society, we recognize activities that may not result in
obtainable or consumable products, but have a positive impact on
society as a whole. Firefighters, scientists, doctors, the police, and
other services. Teachers have a positive impact on society, but so
also do students.

And so the future society credits all these people and more for doing
their service to society. Yes, even kids in grade school. Going to and
succeeding in medical school is something worth rewarding, right? So
the future society credits the students (as long as they make
progress) and credits the teachers as well.

The doctors who operate on patients don't need the patients to “pay”
them this way – their work is acknowledged by society as good, so they
are credited. They didn't have to accrue crippling school debts or pay
for malpractice insurance (the future society doesn't have insurance
firms), and they tend to love what they do, so they're satisfied
earning time and energy credit at roughly the same rate as everyone
else.

The mechanisms by how categories of work are credited varies as
widely as the different communities we live in. And facilitating these
kinds of social investments are an institution from today we recognize
in form if not in practice: banks.

The Way Banks Work in the Future

Because these future banks do not trade in currency, and because they
are not motivated by profit, the financial wizards who run them are
concerned with two things: sustainability and economic responsibility.
The people who run the bank might be elected by the community, or
appointed by a public official, or merely exist as a cooperative
serving voluntary members. Each bank represents a sub-network of
credit-holders, almost a sub-system, as it were.

The banks have a local and global responsibility: they must regulate
local projects, enterprises, and other economic activities by
facilitating agreements on what activities can be assigned credit.
They must make sure that these definitions are compatible with other
banks / communities definitions of credit, or risk incompatibility.
For instance, a community of artists that credits people for reciting
poetry to cows and other barnyard animals may not find their credit
welcome in other communities that value activities like feeding and
slaughtering cows. Conversely, that community of vegan artists may not
approve the credit of a network that participates in the slaughtering
of livestock.

The local responsibility is the same as it has been for thousand of
years: issuing loans for those that wish to start some enterprise. In
this case, it's a matter of allowing someone to have at one time more
debit than credit, so as to get their business started. Each bank
might have their own rules about this; they might get personal, and
interview the prospective business owner, to see if they're good for
extending credit to (because if their business fails or is not useful,
the community the bank represents ends up eating the cost of that
failure); they also might just place some mathematical rule in place
(such as “you can only have twice as much debit as credit, at any
time” and leave it at that.

In this way, these future banks are not monopoly-forming
multinationals hell-bent on the accumulation of wealth: they are a way
for communities to self-regulate economic activity and enable global
trade / standards. There's no way to rob a bank in the future, so
their security concern is more of identity theft than actual theft.

You may wonder, then: if these banks are so involved with the running
of communities, even services like water, sewage, police, and
firefighters, then what is the role of government in the future?

The Role of the Future State

What is the government, if not a collector and spender of taxes? The
State is the most powerful bank, now and tomorrow. In the current,
plutocratic United States of America, for example, the Federal
Government represents the interests of the wealthy, and acts to enrich
and defend the wealthy. This is shown by the trend of the Federal
Government collecting less taxes from the wealthy and relying more
upon outside loans and taxes from the poor.

But the current system relies upon currency: a system that allows
wealth and power to be transferred anonymously along, until it accrues
in the very top of the pyramid. Subjective values enable capitalism.
Without a capitalist system of trade, the State becomes democratic
again.

The State in the future has a much diminished role: it carries out
various services important to the functioning of society: maintaining
a defensive military (much smaller but more automated and more
efficient than our current one), inspecting water and air for
pollutants and their sources, responding to natural disasters with
emergency relief, protecting its citizens from extremist / terrorists
domestic and foreign, and managing shared infrastructure. Like the
Postal Service.

What's Stopping This Future From Being Reality?

Only our will.

Information technology is more than adequate to facilitate the credit
system. Smartphones are good enough to facilitate transactions and
biometric identification security. Social network sites illustrate the
type of data structures needed for community banks to function.
Science already enables us to tally pollutants and estimate costs of
cleanup.

Some ideas need refinement. We need to separate the concept of the
free market from the concept of capitalism. We need to accept that
costs cannot be externalized. We need to incentivize efficiency and
zero-waste. We must accept that the value of time is the same for
every single person, and it is the most precious commodity, since we
are all mortal.

The credit system of the future I have just described results from a
society that accepts those values.