Government with the New Money

Government in the past has always used some kind of physical object money (POM). The money is used to pay the individuals who hold the offices comprising the bureaucracy which is what most people think of as being "the Government." (Note that only a few of the offices in a democratic political system are elected. Almost all office holders are hired {appointed} by other office holders.) If the office holders are not paid they stop working and the government ceases to function. Therefore the governments have been dependent on acquiring money in order to pay those office holders. (Please note that the office holders include military personnel and police.)

In a society using the new money, the individuals who hold office are paid by the payers. Any office holder who is not providing any benefit to others through the exercise of that office will not be paid. Therefore, office holders attempting to abuse their power will find that few or none of the other individual office holders will cooperate with them. This limits the power of any office holder to do harm. In fact, even if they are able to do some harm the other office holders would be trying to stop them and trying to mitigate the damage done.

The size of government.

Every government has functions to perform for the society of which it is a part. Unless the individuals who hold office perform those functions the members of the society suffer. In the U.S. and many other nations one of those functions is to provide various kinds of welfare benefits. This is not a function of government in a new money society. Another function performed in all past governments it the regulation of trade. (I am using the broadest meaning of the word "trade" here. It includes all kinds of business activities.) It is not a function of a new money government at any level to regulate trade. Representing the nation in relations with other national governments remains a function of New Money Government (NMG). This includes providing military resources and exercising control of the nation's military forces. NMG also performs the enforcement of criminal law function as well as providing courts both civil and criminal. It also performs the function of providing for carrying out the sentences of the courts.

If we omit consideration of the military, since its size can fluctuate greatly depending on the situation, the size of an NMG is only a tiny part of the population of the nation.

Since the NMG has no need of luxuries it has no need of any money at all. There are no taxes of any kind at any level of government at any time. People will not have to spend their money for government services.

The payers are not part of the government. The government does not control the payers. The payers do not control the government. The payers are more like evaluators of government's performance. If the government performs well then the office holders who contributed to that performance will be paid more. If the government performs badly then the office holders cannot expect to be paid much if anything because little or no benefit was a consequence of their actions. The payers have no say in what the government does. They only judge whether the government worked well or poorly. In other words the government office holders are just another set of producers whose performance is evaluated by the payers on behalf of the consumers (the public).

Since the new money government does not regulate trade, does not provide welfare benefits, and does not tax, there are relatively few motives to attempt to unduly influence (bribe) an office holder. Some current office holders may find this a terrible defect in the new money government.

In fact, if you look at the individuals who hold office as being independent, private business owners, we could say that all these government functions were being contracted out to the private sector . The office holders contract to provide a particular set of services perhaps for a specified amount of time and to accept appropriate orders from the holders of certain other offices. They the work sort of "on commission" for a share of what one might call the "government's profits" (the value of the benefits produced minus the value of the harm done). They are, in effect, "selling" the benefits of their work to the society. Looked at in this light one could say there was no government in the traditional sense at all. Of course, if one looks at the functions being performed, which are governmental, instead of at the individuals doing the work, then it is just another government. It is all in your point of view.

Elections

Most nations are democratic at least in name. The new money government works quite well with democratic governments. Rather than contributing money to a campaign one can contribute capital goods one owns. One can provide services (one's own labor) to the campaign. Persons who work in a mass medium can earn money by providing information on each candidate's platform and positions on the issues. Media workers can also earn money by providing biographical information on candidates. Campaign ads can be purchased, of course, by individuals since that is a luxury service. But if one attempts to publicize a lie about a candidate (whether flattering or libelous) the media can get paid for also presenting the truth right after the false ad. In other words, bringing out the truth about the candidates is a public service (a benefit) which deserves pay. Therefore the opportunity to bribe a candidate by helping them get elected is quite limited. Also please note that businesses and other organizations do not have money. Only individual people can have money. Therefore no organization can contribute services or ads just because some of its officers want a particular candidate to be elected.

Not all governments are democratic in makeup. The new money will work quite well for them also. Of course, as in the democracies, the more the public (the people of the nation) benefit from the performance of the office holders the more the office holders will be paid. The government cannot be totalitarian nor despotic since the individuals who comprise the government will not get paid if they carry out such orders.

In other words, government office holders have great power only so long as they are using it well. If they abuse their power it goes away. Just as in the rest of the economy the three party aspect of the new money prevents the government producers from having too much power over the public consumers.

For you government theorists reading this you can see that the payers provide a feedback mechanism for government such that the government will evolve toward whatever works best or at least better in the particular situation/context. We do not have to know or predict what form that government will take since it will be changing rapidly to adjust to circumstances. So long as the society can meet the minimum requirements for the new money it can take all sorts of shocks and upsets due to both natural and manmade disasters both physical and social and still quickly adapt and recover. The new money is making the government a part of the free market since all the individuals who make up that government are working in a free market to sell their services to the society. This is impossible with the POM governments of the past. Therefore POM governments always tended to drift or colapse toward dictatorial tyrany even despite the heroic efforts of some of its citizens. When conditions got bad enough there would be a period of unrest and a "new" government subject to the same POM problems would take over and the cycle would begin again.

The Laws.

Most legislation in POM societies is concerned with the spending of money and with taxation to acquire the money to spend. Since such matters are not a part of a new money government, the various lawmaking bodies of a new money government system would not make any laws about how money is earned or spent. They would have no control over any person's money. The legislatures would also no longer regulate trade by legislation. POM laws always attempt to regulate trade which creates the opportunity to make money by engaging in black market activities and organized crime. Therefore the amount of criminal law could be considerably reduced to mostly crimes involving violence of one sort or another and various kinds of theft of property. If properly written, the criminal law could approach the size of the Mosaic 10 commandments. Perhaps something along the lines of "Don't hurt anybody and leave their property alone." Without POM most current criminal laws simply are irrelevant.

Now legislatures, being composed of human beings, will from time to time pass stupid laws. I expect that will be true in new money legislatures as well, and they will do some damage. The legislatures will experience a corresponding reduction in their pay since that damage will be deducted from the value of the benefits they generated. Also, the enforcement of that stupid law would probably not be carried out if the damage from such enforcement would be apparent to the individuals doing the enforcing. In other words, the new money would tend to minimize the damage from the bad law and the legislature would be likely to repeal the law quickly.

In 19th century democratic governments the legislatures often met for only part of one year and did not meet every year. With the reduced work load I would expect the same thing to happen in new money governments.

The courts.

The new money does not require or cause any particular kind or type of court or court system. It will sharply reduce the amount of work needed by the courts. There will be far less crime since there will be far less opportunity for crime, far less motivation for crime, and far fewer things that will be considered criminal acts. Civil courts will have no power to transfer money from one person to another. This will remove the motivation for bringing a lawsuit in most cases. The court cannot take money from an individual either. Money in an individual's account can only be removed by that individual. The court can "freeze" an individual's account for a time subject to due process. Since money only buys luxuries the individual cannot be physically harmed by this no matter how annoying it might be.

Law Enforcement.

Those individuals who enforce the law also are paid by the payers. Their job is greatly simplified by the new money since there are so many fewer crimes and so much less criminal activity. Those who abuse their powers are not paid or at least have their pay reduced. Equipment used to enforce the law will be readily available since law enforcement tends to provide major benefits to people. The organization of law enforcement will evolve just like the rest of government toward that which most pleases the public due to the money feedback from the payers.

Criminals who attempt to flee will be stopped by having their money account frozen by the court. Since most travel is a luxury they could run but would have dificulty getting far. Each attempted purchase of gasoline, for exapmle, would indicate their location to the law enforcement organization.

Privacy.

Privacy is highly valued in some societies. For those societies, unauthorized access to information stored in computer data bases would be considered great damage to the individuals so exposed. Therefore great pains would be taked to safeguard that information. The new money system retains the information about all uses of money in the money data base. Those who write the programs and maintain these systems will lose much money if they fail. Thus, unlike POM economies in which the owners of the data bases are given a motivation to sell one's information to others, private information is much more likely to remain private.

But, with due process, that personal information about money use is available to the law enforcement agencies. If the consensus of that society is to make that access extremely dificult or even illegal they can do so.

The military.

Defense against military attack is a necessary function for all governments. The form that defense takes should vary with the nature of the threat. Therefore the first consideration for the military of any nation is to determine the nature of any possible military threat. This requires inteligence gathering at least from outside the society and perhaps inside as well. Since we cannot know now what forms these threats may take nor the nature of the societies from which they will come we must have a general procedure that in extremely flexable and adaptable. The new money provides that. Once again the payers provide money feedback to the individuals who gather, analyze, and diseminate the military information gathered. Those persons who provide or help acquire valuable information are paid accordingly. There being a free market in the new money government, anyone who has or can obtain such information can be paid for their contribution whether they are part of the government or not and whether they are a citizen or not. In other words, it is like a standing reward for information about any military threat reguardless of the source of that threat. Just imagine the worry that any terrorist would have if they knew that if anyone revealed their plan that person would be greatly rewarded. In the case of the World Trade Center attack the reward would have been at least hundreds of millions of dollars at today's money values. Could they really trust all their conspirators, both in the U.S. and abroad with that kind of reward for being a traitor?

Supplies of military materials are required by almost all military operations. If a need for such arises, those who can provide them are motivated to do so knowing that they will be paid for them according to how useful/helpful/beneficial those supplies are. This means the suppliers, to maximize their income, must not only arrange to provide the appropriate materials, of the appropriate quality, at the appropriate time, and at the appropriate place. If they give those materials to the wrong people their pay may be smaller or there may be no pay at all. This motivates the suppliers to do a good job. Since the suppliers do not have to win a contract or wait for congressional appropriations they can begin production (or design depending on how ready they are) imediately upon recognition of the need. Since time is often crucial in military affairs such quick action can be invaluable. As an illustration of what can be done by properly motivated people who know what needs to be done and how to do it I cite the case of the repairs to the USS Enterprise before the battle of Midway in WWII. Repairs that required a month were completed in three days.

Almost all military supplies are materials that have some use in civilian life. All the clothes, food, shelter, transportation, and so forth can be used in civilian pursuits. Therefore civilian materials can often substitute for military supplies in an emergency. In the new money society, such civilian materials would be available to the military defense immediately.

Military grade weapons are of little use in most civilian pursuits. Therefore these materials would be a riskier "investment" of the producers' resources. Only a war or threat of war would generate significant income for the producers. On the other hand, if needed in war those weapons would be very valuable and generate high income. Thus the emphasis would tend to be on weapons that were versatile, durable, and recyclable. That is the more applications a weapon has the more likely it is to be used. The "Swiss Army Knife" theory. If a weapon is durable, it will last a long time and thus be more likely to generate income eventually at least. If a weapon is recyclable, the materials from which it is made can be recovered for other uses, thus making the cost of the weapon to the overall economy less than would be the case if the weapon could not be recycled or were difficult to dispose of.

Military Organization.

Nowhere in human endeavor is it more necessary to have coordination and cooperation than in military operations. Starting an attack early or late can spell disaster. Not providing the needed help or information can be the difference between success and failure. Therefore the attitude of the individuals who comprise the military is very important to the success of their units. The new money society emphasises cooperation and doing what needs to be done whether one is told to or not. This emphasis comes from the rewards available for making things go well in the economy and in other parts of life. This habit of mind of always looking for ways to help (earn money) and for better ways to do things which generates big payoffs is just what makes a bureaucracy work well.

Since people expect others to cooperate willingly, management is no longer the opponent of labor. The individuals working together feel themselves a part of the same team. They profit by teamwork. Today one usually only sees such things in sports and music. Team chemistry is said to be a vital ingrediant in championship teams. This makes management much easier and also makes for better managers. No manager can benefit unless the managed also benefit. They are all on the same side. There is no simulation of a zero sum game. Therefore the bureaucracy of the military is able (if it doesn't mess up for some other reason) to be very efficient.

The feedback loop from the payers also works for the military. The only true test of the military is war. But if the military is to convice the payers that they are doing a good job during peace time and deserve high pay they will have to demonstrate their abilities in a variety of ways. Oddly enough, most of the ways to do that are excellent training. If the military is really good it will "foil" threats short of war. The best generals win the war without battles. Unfortunately we don't hear much about them.

The more resources the military consumes the less net benefit the military is providing. Therefore the individuals who comprise the military will be motivated to consume as little military resources as is commensurate with good training and preparedness.

In military conflict the winning side convinces the losers that they have lost. Traditionally this has come only after considerable bloodshed and loss of life and limb. The expense of these wars has been huge. I would expect the new money society to look for ways to convince their enemies that are less expensive. Now since other governments are also composed of individual people who are acting in what they see as their own personal best interests there is a good chance that some can be bribed in a variety of ways. In fact, with the wealth that the new money society should have it might be possible to bribe the common soldiers of the enemy army with consumer goods. How could the enemy heads of government trust the soldiers they sent into the field to not surrender just to get those bribes? If prisoners were usually sent back to their side with a lot of consumer goods what would the enemy do with those soldiers? If they take the bribe away from them they will alienate the soldier. If they let them keep the bribe what is to prevent the soldier from surrendering again at the first opportunity? What is to prevent his fellow soldiers from doing the same thing? The enemy army might disintegrate right out from under their high commanders.

Also, most wars have a totalitarian government on one side or the other. If the leader of such a government is killed or otherwise eliminated then the war can be prevented. If there is a small group at the head of the government, they can be attacked. It seems quite wasteful to kill hundreds of thousands of people to stop a few individuals. This idea has been unpopular in POM governments because they are run by the individuals who would be the targets of such a means of defense. They would much rather have the heads of government be considered "above the fray" and not to be touched. They would prefer that the cannon fodder be expended rather than their own lives and fortunes be affected.

Military agression.

War is very expensive. Aggressive war is far more expensive than anything that might be captured in the war is worth. Therefore no new money military organization would fight anything other than a defensive war. They could not get the troops, the supplies, nor the other support they would need to conduct such a war even if the generals all decided to have one. If the generals invited us to a war everybody might go home instead.

Diplomacy.

This will be one of the most difficult functions for the office holders of the government to do well. The problem is that the office holders will be living in other nations which may use a POM. If so the problems of bribery and such come up. precautions would have to be taken to be confident of the motivations of the foreign service workers. The payers live only within the new money economy and do not go abroad. Thus, it will be difficult to pay those abroad fairly. As communications around the world improve this will become less of a problem but will remain a danger point so long as any POM nations exist.

For the domestic staff of the government foreign affairs officers the usual relationship with the payers would exist. The better they do their job the more they will earn. They will also evolve to more efficient and effective procedures and organizational forms.