At least since the 2008/9 global financial crisis, it would always strike me as very odd why "financial innovation" would nearly exclusively mean derivatives, high-speed trading algorithms, automatic stock speculation techniques etc. … or in other words: improved mutual exploitation. Because it's obvious that even our most basic financial tool – money – has big usability issues and unintended side effects. Here is the list of what I see as the biggest flaws and design problems for money – if the goal is an inclusive, sustainable economy and a society with no extreme inequality:
- Interest benefits the already-rich and increases inequality. Nearly all money today is "fiat money", created "out of nothing" in the process of mortgaging securities. So for money to exist, somebody has to go into debt and pay back this debt with interest. That interest is passive income for some, and increases economic inequality in a society. Because that kind of income is a percentage of current wealth, so significant for the already rich, and insignificant for those with near-zero wealth.
- Interest imposes unhealthy perpetual growth and consumption on economies. Of course infinite growth on a finite planet is impossible, but still it is the goal in a debt-fuelled economy where every indebted business has to strive hard to make more profit to pay its interest. From that follow decades of relentless advertising and a wasteful, consumption-driven mainstream lifestyle, and environmental exploitation of the planet. While many may accept that as a given in a "human vs. nature" ideology, just imagine for a moment: What if the global economy would incentivize building up ecological value, for example by large-scale ecosystem restoration?
- Money is too hard to obtain for small and new businesses. Fiat money as we know it fulfils both the "medium and exchange" and "store of value" functions. That makes it as useful as possible, and very desirable to be hoarded ("saved"). Now saving alone does not mean that money is hard to come by for economic exchange and investment, because it is usually saved in bank accounts and thus available for lending by banks. However, only credit-worthy individuals and businesses can borrow. Small and new businesses are not among them. So in effect, money puts small and new businesses into a structurally disadvantaged position. With money as we know it, starting a business out of a situation of unemployment is very hard or next to impossible.
- Money-based purchases support unfair and unhealthy production. Money suggests that everything has a price and that of two equivalent goods, you should always buy the cheaper one "because it has better value for money". However, that is an illusion that leads to long-term issues on the scale of societies. By buying something, the buyer supports the practices involved in its production. So by always buying the cheapest items, more often than not we support low wages, non-existing worker rights, ecologically unsound production techniques etc.. And since money is a completely anonymized representation of value, it hides the way production happens. So when money is scarce (as for everyone at the bottom), people will buy based on price alone, perpetuating their collective fate as low-wage workers.
- Money can move globally, putting labour at a disadvantage. That's not just an attribute of money, but money and economic globalization of the wrong kind: since profits and investment money can move quickly between countries but people can not, the negotiation position of workers is weak. They will have to accept low wages as "better than nothing".
- Money-based economies are prone to deadlock. When buying based on price alone, there is no regard for the future of how the buyer will ever be able to earn the spending back. In a purely technical sense this is legit, since the buyer saved up the money in the past, so can spend it for anything in the present. But on the larger scale, money has to flow in circles for the economy to work. If, in an extreme case, one company produces everything at the cheapest price due to full automation, and so everyone buys from them but they have nothing to spend the money on, the economy quickly grinds to a halt as everyone else will run out of money to spend. It's quite similar but less extreme whenever buying something from big business: profits of big business will never benefit small businesses again. This creates huge unemployment and bullshit jobs even though "the unemployed" can be productive. Their only fault, in a monetary "winner takes all" economy, is that they can't compete with the prices of big business, and if only by a few cents.
- Money makes people and companies suffer from exchange rates they did not cause. Exchange rate of free-floating currencies result from the market-based desirability of the different currencies. For example, if there is a high global demand for German cars, that maps to a demand for the currency to pay them in (Euros), increasing the relative price of this currency. Conversely, currencies of economies that produce very little that is wanted internationally have a low price. That difference means that members of these economies have to pay a very high price when buying "internationally desirable" goods in other currencies. Even those few exceptional companies producing international desirable goods in an otherwise uncompetitive economy are slapped with that penalty, which is obviously unfair.
Now with this huge list of money's flaws in mind, here's the list of how our new development "pay coupons" avoids nearly all these shortfalls. What you have to know about the inner workings of pay coupons is, at this point, only this: Your pay coupons are value vouchers denominated in official currency (like Euros) that others can use to pay for your (and only your) products and services. Pay coupons of different types are not interchangeable (they are "different monies") even though they share the same denomination. Pay coupons are created by automatically detecting "coupon order cycles" in a network of coupon orders. So for all coupons received in a transaction, a user pays by issuing own coupons of the same amount to those who ordered them. And a detected "cycle of coupons orders" is equivalent to a self-sufficient economy (limited to a certain transaction value of course) that will unfold gradually and over time as the exchanged coupons are used to pay for products and services.
- No interest. Technically, a coupon represents debt payable to the coupon holder, but in a coupon economy the coupon holder is happy to have obtained the coupon at all because it is meant to be used for a purchase. There is no expectation that a coupon will "grow on its own", since coupons are short term debts within a transactional economy, not unlike a "30 days payments term" on invoices, which is also without interest. And with interest out of the way, the predominant way how money currently serves the rich is also gone. Also without interest, there is no need for economic growth just to keep indebted businesses afloat.
- Self-issued. While money can only be obtained by credit-worthy (i.e. wealthy) businesses or individuals by mortgaging securities, pay coupons are much easier to obtain: you just issue them when obtaining coupons of others. It's like printing your own fiat currency, in a reasonable amount that can be backed by your promises of products and services. This is especially interesting for small and new businesses, as they can now pay others for essential services when setting up a business.
- Prices do not compete globally. With money, global "winner takes all" competition about prices is what perpetuates exploitative production conditions. With pay coupons, it is different: If you start from a situation where everyone, including the most competitive businesses, only order from the most competitive businesses, the "economic loops" where pay coupons are issued will include only the most competitive businesses. This forces the less competitive businesses to add alternative orders. So they will order from less competitive businesses this time, which will include them in the next coupon transactions. In a pay coupons economy, there is no "winner takes all". The less productive participants are not forced out of the market and left unemployed, but end up creating a market of their own. Even better, with pay coupons the most competitive businesses are forced to order their inputs from less competitive ones if they want to increase their turnover! There is no global competition about price any more. With pay coupons, the competition is not just about price (that is, incoming orders) but about both incoming and outgoing orders. Only when you have both, you get coupon turnover in the circular exchanges where pay coupons are created! And creating outgoing orders is easy: just order more, even from those who don't offer the best prices.
- Little hoarding. Pay coupons discourage hoarding, as they are not universally useful but split into many types, each of which can only be redeemed at one person or company. And without hoarding, one reason that can cause economic slack is gone (namely, savings without investments).
- No capital flight. The little hoarding that is possible in coupons is also not empowering any wealthy elites, as they cannot even threaten to move their wealth off-shore to weaken workers rights. Pay coupons are not "universal token of rights" that could be moved around and spent globally, but they are tied to be spent at one person or company for each coupon type!
It may be that the wealthy created fiat money deliberately in a way that benefits them. But we're not forced to keep using their money, to keep them rich and us poor. If fiat money is the money of the wealthy, then pay coupons is the money of the common people.