I’ve often wondered what would be the catalyst for the next major recession. As cryptocurrencies went mainstream, it occurred to me that one way in which we could shift wealth would be through the adoption of a new currency. How amusing would it be for the 99% to develop a currency to use among themselves, while the top 1% ended up with monopoly money. As fun as that sounds, it’s not quite that easy. But something about this crypto.. maybe there’s something here.
Bare with me on this… what if we introduced a cryptocurrency with a built-in distribution algorithm?
Fundamentally, the first things we’d have to decide on is a fundamental stance on how we should distribute resources. My vote would be for a simple mandate that more resources should be awarded to those who contribute more. If we can all agree on this (which should be rather easy), then we would just have to decide on how exactly that distribution would play out. A while back, a Harvard professor asked what people thought was an fair distribution of wealth among Americans. The top 20% looked to occupy about 35% of the country’s wealthy while the bottom 20% occupied about 10% of the country’s wealth. The middle 60% occupied about 55%. Sure, why not.
Or maybe there’s a way to tie the bottom 20% to cost of living? If you were constantly tracking accurate statistics on cost of living, you could always make sure that the bottom 20% was a certain margin above the cost of living, ensuring that those at the lowest run of society were always afforded an opportunity to get ahead. From there, perhaps you could let the currency do as it may.
Either way, the idea here is that through poor governance, we’ve found ways to systematically shift wealth from the many to the few. Beyond the ethics of it, this actually creates a great deal of economic hardship. Whether it’s going to school, starting a family, buying your own house, or starting a business, it all costs money. Once upon a time, you could comfortably provide for a family on a single middle-class income. Where I live, the cost of a middle-class lifestyle is about $300,000 a year. So people maybe don’t go to school. People maybe don’t start a family. People maybe don’t start a business. And maybe we all take a step backwards.
I can’t help but think that the pursuit of power is a human instinct. If so, the pursuit of power will always be an element within governance. If true, government will always be susceptible to corruption because as we all remember, power corrupts. So if government can’t be trusted to maintain a fair distribution of wealth, how do you address this? You build it right into the currency.
So how do you go about getting people to adopt a currency like this? Imagine being the person who brings 10 million dollars to the currency, only to end up with 5 million because half was redistributed to all the people who signed up with way less? What would keep you from signing up with a single dollar, keeping the rest of your assets elsewhere as you accumulated ‘equality’. As soon as I thought I was on to a genius idea, I realized this was a rather daunting hurdle. But not an unsolvable one.
There’s something here… but I’m not quite there.