Multi-Dimensional Currency

Another idea that I have been thinking about for a long time... this current recession motivates this blog.

Currency is currently one dimensional, that is, it has one value and all currencies are just a variation of the same thing apart by only a factor. My idea, which I haven't completely worked out, is that currency should be multi-dimensional, that is, it has different value dimension depending on the usage domain.

In Canada, we might consider healthcare a form of alternate currency for citizens. Healthcare is universally free for the most part, we contribute via employee benefits to additional health coverages like dentists, drug and eyecare etc. The value of the services received for some individuals who use the system is much more than what it would cost them individually and for some it is less. We could have a bank account that we tap into which has monies in it placed by the government which is the equal balance each citizen receives annually for our tax contributions. This account might have atleast $160 billion (total cost of health care)/30 million (approx population of Canada) or just over $5,000. We could see the money come and go as we use the healthcare system but we cannot use it for anything else. Availability of healthcare is independent of whether there is a recession or not.

Another example of alternate currencies are loyalty rewards that we accumulate. Again they have value but are only usable with certain rules attached to their usage.

My first thought is to attach all your loyalty points from all the programs you participate in, your healthcare dollars and the actual cash you have to one account or institution, maybe the bank of your choice or a central bank. If this happened you could see the multiple dimensions of the currency that you have and you could have one card that you could use to access this value in the appropriate situations.

Another thought. Like healthcare can we decouple certain rights from the fluctuations of the economy. Shouldn't we all have the right to food, shelther, clothing in addition to healthcare if we are productive members of society. I don't mean this in a communist sense, that everyone has exactly the same but we all get a minimum based on the fact that we go to work everyday or contribute in some other important way like raising children etc. Some of has who have the fortune to earn more can use the additional earnings to purchase additional food, shelther, clothing, leisure etc. with the additional income earned. I don't advocate innefficent government running with these additional programs but I don't have an alternative at this moment. These additional accounts would have to be funded from the productivity of all participants in the economy.

We could add these currency dimensions to our one currency account, which now contains, healthcare dollars, loyalty points, food account, shelter account, clothing account, your cash and credit. Only your cash and credit are exposed to market fluctuations.

We could also add tax credits or government loyalty points as another dimension to our one currency account (see my previous post on zero sum currencies). Now we would have all these different dimensions of value available in one place and maybe the actual real money value of all these dimensions accessible in that one place also accessible by one smart card in our wallet.

What would happen if we allowed individuals to move value from one dimension to another, if their behaviour led to excess in some dimensions and shortfalls in another. The rules for moving from one dimension to another to be defined maybe by government programs and their incentives to promote behaviour that leads to government budget efficiencies or by loyalty programs or corporations. This would be like turning some portion of government and corporate spending to individuals and allowing individuals to arbitrage government programs, loyalty points, cash etc. in unique and unimaginable ways that would drive orders of efficiency not otherwise predictable at an aggregate level. The government portion is only be possible first by aggregating the value of all of the productivity of the economies participants and then distributing it back to the individuals with programs and incentives for behaviour which allow all the value to be utilized. Loyalty programs do essentially the same thing, aggregate consumer spending and use the aggregate buying power to create rewards not individually achievable and then distributing the buying power back to individuals. The loyalty program seems to create incredible value out of nothing. (It creates value out of the inefficiency of retail). We can similarly get much more value out of government programs because guess what ... they're inefficient too.

The benefits,

1) Basic human needs decoupled from business fluctuations. Recessions hurt dumb businesses not the individuals who show up to work everyday and have very little say in what businesses do.

2) Opportunities to create significant economic efficiencies by creating one multi-dimensional currency accessible (or at least viewable) in one place attached to one smart card which allow individuals to move value across dimensions and allow individuals to seek the personalized efficiencies. Let's call this economic micro optimization ...

3) a minor benefit would be to eliminate all the cards (loyalty, credit, debit, ...) and replace them with one.

I haven't worked out all the details but hopefully presented enough of an idea or ideas that if some smart individual or economist hopped on this, they could either rip it apart or run with it.

I'll continue to think about it and work out the details to the best of my ability ... and maybe launch another information based business.

The power of information....