You are the new kid on the block in a rather tough, run-down neighborhood. The police don't like to visit this area and would never dream of going alone on foot to patrol there. The parents in the neighborhood are, in many cases, addicts and worse. You are 12 years old. What will happen to you? First off, you can expect to be bullied by some of the local kids. They may steal things from you. They may give you a beating. They may force you to do things you would rather not do.

Most of the kids on your street are in some kind of gang or other. What can you do to gain protection? The obvious answer is to join one of the gangs. Now the gang protects you in exchange for your loyalty and obedience. But now you are dependent on that gang for protection from the other gangs. Now you must do as they ask or you will be punished. You are no longer independent.

Now let us compare that situation with a different one. Once again you are the new kid on the block but this neighborhood is upper middle class in a pleasant suburb. When you go outside or to the park to play there are parents around to keep an eye on the kids at play. If any kid tries to abuse you, your parent or some other parent will stop them. There are no gangs. In this context you are independent. Not in the sense that you don't need anyone else or you could get by if there were no other people. But in the sense that there is no one group upon which your well-being depends. There are lots of people you can go to for help and who will take care of you.

This is the sense in which a person can be independent. They can be in a situation in which lots of people are willing to meet their needs, to cooperate with them on projects, to protect them from harm.

Now let's see which of the above kinds of situation most closely approximates an economy which employs a physical object money (POM), a money which is or represents a physical object.

If you read "POM: A Zero-Sum Simulation", you will recall that the use of a POM simulates a zero-sum game in which for one person to win or gain some other person or persons must lose. In a zero-sum situation the various parties are opponents, competitors, enemies. This matches the rough neighborhood situation. In order to survive, succeed, and win in such a situation, one must seek allies, in other words a gang. That's what people do. They find a powerful gang to join. There are legal "gangs" called businesses or corporations or unions. Some people form their own gangs. If one is a member of a gang, one is protected so long as one is obedient to the person who controls one's pay. But one is now dependent on that gang, on having that job. One is vulnerable when one does not have the protection of that gang and the income/security it provides. Therefore, one is controlled to a considerable extent by that employer.

Have you ever been asked by the requirements of your job to do something you thought was immoral or could harm someone else? Have you ever wondered whether the business you work for is doing more harm than good? I live in the heart of the tobacco belt. There are lots of tobacco industry jobs in the area. I would imagine that every one of the people who work for tobacco companies in this State know that cigarettes and other tobacco products kill and otherwise harm people, including children. Yet they continue to work at those jobs. They defend their self-image by a variety of rationalizations but they know that the work they do has bad consequences. They only do such things because they are dependent. The nature of our money has destroyed their independence.

On the other hand, let us consider a new money which is not a POM. This new money exists only in computer accounts. The new money simply appears there when earned (we will ignore how that comes about for now) and ceases to exist when spent. That is, the money is not transferred into the account from any other account and it does not go to any other account when spent. Just take it as a hypothetical society.

In this hypothetical society one can only gain money by actions which result in a net benefit for others. In this society, one is able to gain help and assistance from almost any other person because that person will receive pay (though not from you) for such actions. It will not matter whether you have money or not. Any and everyone who wants to have more money to spend will be motivated to help you. Therefore, in this hypothetical society there is no zero-sum game simulation because of its money. One can only gain or win if someone else or many others also gain or win. It is an all-for-one and one-for-all situation. If one wins, then at least one other person must also win. If anyone loses, it detracts from the winnings of some of the others.

Therefore in this hypothetical society with this new kind of money, no one is dependent upon a single group or individual. There are many groups and individuals who will help. Everyone is independent due to the nature of their money.

Previous: POM And The Gold Standard

Next: POM Feedback Loops

Care to comment? Please click here to email us!