Today the rich control money supply. There's no chance for the poor. They cab increase their gains by 10%, but it will be taken out from them with little effort.
Whoever actually serves society and earns coins for their service will keep their value in the long run. In one generation, or less, it will be possible to ascend from a poor level.
Just like it was possibke and happened all the time earlier, when currencies were pegged to non-inflationary assets, like the gold.
That's only true if the monetary supply remains tightly constrained. As long as we are willing to tolerate inflation the 1% can become richer and the 99% can also still have access to money. Otherwise, in order for the rich to accumulate more wealth, it has to come from somewhere.
Yes, the rich can be stripped. But they'll be replaced by another elite. I think human nature will tend towards some kind of hierarchy.
The opportunity is to make the currency of that hierarchy something far above basic needs, IMHO. Perhaps this could be a genuine use-case for cryptocurrencies, so that the ultra wealthy can 'keep score' in maths, rather than mega-yachts, private jets, dark satanic mills, etc.
That's an antique notion that died in the '80s? Once the rules changed, the rich started skimming from every transaction (money tranfers, dividends, security exchanges, and on and on) until they have almost all the money. The rest of us serve at their pleasure.
That's not how it was supposed to work. You were supposed to succeed from being part of the generation of wealth. Not just sitting and skimming while everybody else works. And then passing it on to your heirs.
I wish it worked as you describe. That's where we need to get back to.
"Rich get richer" would be if people with larger shares of the total money supply tended to increase their share.
But with Peercoin, for example, everybody earns annual interest of 1% of their holdings, paid in new coin. Let's say instead we have DennisCoin which pays a whopping 100% and is worth $1 per coin.
If you start with 10 coins and I start with 90 coins, then after a year you'll have 20 coins and I'll have 180. I still have nine times as much as you.
Since the number of coins has doubled, the currency value drops in half. So in dollar terms, you still have $10 and I still have $90.
New money doesn’t go to “the rich” per se it’s the product of loan origination. Whoever borrows money. In America that’s a national pass time for everyone. I wager the lower income borrow more as a fraction of net worth than anyone else.
I’m curious how an inflation free money might stop people starving in a country unable to provide even the most basic services?
Decoupled from government maybe - though to a degree all the major central banks are. But it’s the passive management by an unelected group who made completely arbitrary decisions accountable to nobody with no consideration for what makes a good currency.
I don't believe that. The poor will always have an incentive to work hard to get rich. The poor will always keep the economy running. It would be easier for people to succeed (and more motivating) if they didn't have to compete against the massive capital of incumbents.
A deflationary currency only incentivizes the rich to stop working and stop participating in the markets... Which is fine IMO. They're rich, they don't need to work anymore. The best thing they can do is step aside and let someone else have a chance. Their massive capital, when put to work, would mostly serve to monopolize markets anyway... And it's a net negative for everyone.
There is a false belief that rich people are so essential that the economy would collapse without them... But if you look at history, you would see that educated poor people have repeatedly been able to pull themselves out of poverty... I.e. economic 'miracles' (e.g. Germany after WW2, Japan, South Korea...).
People should get rich and retire. There are always going to be plenty of younger motivated people with fresh perspectives to take their place.
You just can't. And that's how it's supposed to work. Only a very small minority of the population can reach that kind of worth. It's the foundation of this system, no matter if the baselines grows, there will always be rich and poor.
I wanted to disagree with your post, but after giving it some thought, I believe that you're right.
People will simply start to shift their wealth into areas that are loophole advantaged or hide it altogether in trusts, relatives and even something as banal as precious metals under the pillow.
Rich get richer today by being closer to the money source. In the "bitcoin standard" non-rich people can even keep their money in the bank and don't lose purchasing power by not risking it.
Rich and non-rich will always want to take risk to increase their net worth, however the assets must perform much better to outperform the money. Unlike today where almost all investments appreciate when measured in fiat.
edit:
> That's a political issue, it has nothing to do with how currencies work
Would you agree that it would be a good thing if the base monetary layer would enable that? I only see that happening with a monetary policy that respects savings and is not alterable by a few elected and unelected officials
Only the rich are allowed to get richer. We poor people wouldn't know what to do with money if we had it, we can't possibly be trusted with what little we have.
Which is why we need an anti-rich society. Eat the 1% and redistribute their wealth. I can only hope that a distributed post scarcity society and technology base can render their money worthless.
I'm almost certain there there may be flaws in this though but:
Isn't there a limited monetary supply at any given time? So the richer I get, the less rich other people become. Even after I pay rents and salaries and everything else, if I'm richer than I was before, then there is less wealth available for everyone else.
The rich people will be less rich in that situation. They are in a similar situation now with the current inflation, but growth of money has to be tied to economic growth or otherwise the rich will feel screwed.
I'm not saying it's good, but you cannot screw the rich. The current situation is a compromise and a very sensible at that I might add, despite all the noise from tin-foil hatters.
There are also other, practical consideration which will make what you are proposing impossible to put in practice for a prolong period of time.
I am not sure of that. If all that money ended up in rich people's pocket, never to see the light of day again we won't be having the inflation crisis. The money through various investments is now out in the open, driving up inflation. It is still unequally distributed and that is causing issues. If there was a magical way to distribute that money equally between everyone inflation won't be an issue. Unfortunately magic isn't real.
Pretty much like our current financial system then. You can send ages moving your money from one investment to another. The rich already pay professionals for that and genrally come out on top. Just sticking your money in a normal account and it effectively diminishes over the years.
Even if you give everyone 1 million dollars, NOT everyone will become rich (wealthy) because eventually this money would flow from your hands to the hands of someone that creates value. And you'd end up with the same poor/rich social strata, but now with high inflation.
Whoever actually serves society and earns coins for their service will keep their value in the long run. In one generation, or less, it will be possible to ascend from a poor level.
Just like it was possibke and happened all the time earlier, when currencies were pegged to non-inflationary assets, like the gold.
reply