Hello. My name is Roger Jones and I am coming to you from beautiful downtown Lisbon, Portugal. Last week I met in France with a number of thought leaders from around the world. It was a high-altitude environment, and when I left my head was swimming with new thoughts. I would like to combine a few conversations I had into a single conversation. Today, I would like to talk about what money is, what is GDP in the 21st century, the causes of our current state of income inequality, an idea for dealing with that inequality, and a company that is implementing that idea. All in just a few minutes.
Economics starts with desire or need, represented by demand, and by supply that satisfies the demand. Here we have a concrete example. People want oil to power their cars (Demand). There is oil in the ground that is stored energy from the Sun (Supply).
The assumed value of the money is used to create infrastructure to get supply to the demand. In this case, the value of the money is converted into a factory or refinery to get the oil from the ground and convert the oil into usable fuel for the cars. The assumed value of the money is used to create infrastructure to get supply to the demand. In this case, the value of the money is converted into a factory or refinery to get the oil from the ground and convert the oil into usable fuel for the cars. With this transaction, the value of money is determined to be $1 is equal to 1% of a refinery. The fact that all the parties agreed to this transaction indicates that they agree that the money is worth this amount. The money can create a factory because it represents trust among the transaction partners.
Once the refinery is built, it gets turned on. Oil is delivered to the population. The population pays for the oil to the refinery. The refinery pays the capitalists for the use of their money. But where does the population get its money?
The population gets its money from two sources, from participating in the investment and from supplying labor to the refinery. When labor is required in the production, the population has to pay a little more for the oil in order to cover the cost of labor. This picture is a nice little money engine that moves oil into the tanks of automobiles.
The population is heterogeneous. People receiving money from investment are not necessarily the same people receiving money from labor.
Now suppose we have an abundance of automation. In that case, there is no need for labor. The costs of labor also disappear. I had a lumber company as a client several years ago. I had the opportunity to vitit one of the ir lumber mills. That entire lumber mill was run by three employees, one to run the saws, one to run the drying kiln, and one to replace saw blades. If the money flow is not mixed into the population, then only investors make money. This leads to an income gap between investors and labor.
If the money flow is not mixed into the population, then only investors make money. This leads to an income gap between investors and labor, which is a big stress on the population economically. On the other hand, the part of the population that was labor now has discretionary time. Many people use that time to be creative. Tremendous value has been generated on the internet for free. The largest collection of encyclopedic knowledge is Wikipeida, which is free for users. A demonstration of every task imaginable is available on Youtube. Dating sites create marriages. The list goes on. My colleague Chihiro Watanabe refers to this free value as Un-captured GDP. It is a large part of the economy that is not properly measured.
How do we bring the Un-captured GDP out of the shadows and allow the creators of the value to be compensated for their contribution? For definiteness, we assume the creative product is music. Suppose we create a currency, &, that is used to pay for creativity the same way we created a currency, $, We then use that currency to invest in a creative life. At the beginning of a person’s life, we give that person &100. Thus, we buy a creative life the same way we bought a refinery to collect and process oil.
At death, all of a person’s ampersands, &, revert back to the capital fund. While the person is alive, the person can create music and get paid in &. Music can also be purchased with &. We thus quantify the Un-captured GDP with the flow of ampersands. Ampersands and dollars can be converted into each other through an exchange.
I did not make up this model for quantification of the Un-captured GDP. A new company, called Nimses, is attempting to do just what I described. Its units of currency are called “Nims,” which has the value of one minute of human life. The currency is used for life on the internet and can be exchanged for euros. The currency is protected by Blockchain. If you sign up for this service, please be aware that Nimses requires a great deal of information from you to verify that you are a real and not a duplicate person. If you are uncomfortable with this, do not sign up.