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In perhaps a future time where a young society, terrified of the possible outcomes of having a monetary system, decides instead to have a monetary-free system, how could this society create proper incentives to function successfully? In other words how can a nonmonetary system be successful? How can resources be shared in a just manner?

I am looking for solutions to this problem, I do NOT want debate on whether or not to use a monetary free system.

By successful, I mean "functions like what we would consider a successful society today: overall citizen satisfaction and citizens are contributing to the system without revolt or mass inequality." A large purpose of economic systems is the distribution for resources, in a monetary free system, how would resources be distributed to citizens? ex: do citizens get allocated certain resources by default, is there a requirement for hours spent contributing towards society...

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closed as too broad by Aify, Monty Wild, bilbo_pingouin, Gianluca, J_F_B_M Mar 2 '16 at 12:53

Please edit the question to limit it to a specific problem with enough detail to identify an adequate answer. Avoid asking multiple distinct questions at once. See the How to Ask page for help clarifying this question. If this question can be reworded to fit the rules in the help center, please edit the question.

  • $\begingroup$ At that point you're looking at a barter economy, and that's gonna be tricky. $\endgroup$ – AndreiROM Feb 24 '16 at 19:39
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    $\begingroup$ Welcome to the site Zailon, you really need to define "successful" in your question. I am also a little unclear on how distribution of resources is relevant to a non-monetary economy. Please elaborate. Thanks, and let us know if you have any questions. $\endgroup$ – James Feb 24 '16 at 19:42
  • $\begingroup$ Thank you James, I have elaborated a bit further. Im trying to extrapolate a good question without exposing my own biases. $\endgroup$ – Zailon Xwadastet Feb 24 '16 at 19:51
  • $\begingroup$ Are you talking about socialism? $\endgroup$ – enkryptor Feb 24 '16 at 19:52
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    $\begingroup$ I think the real question is whether or not you are looking for using everything of value as currency, or having none. So a barter economy or socialism/communism. $\endgroup$ – Xandar The Zenon Feb 24 '16 at 22:03
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Money is a way to simplify barter systems. Alice has has cooked a fine dinner and needs some wine to go with it, Bob has wine to spare and needs a new pair of socks, Charles knitted some socks but he doesn't need a dinner, he'd rather have some cookies. So how do you convince Charles to give the socks to Bob and Bob to give the wine to Alice?

A money-less society could be one of three things:

  • A genuine post-scarcity society. That requires some more developments in manufacturing and recycling, and even then it is questionable.
  • A command economy, where some central planning board allocates scarce resources. This probably doesn't meet your happiness requirement.
  • An efficient barter society, perhaps with the help of computers, which pretends to be money-free but really isn't.
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  • $\begingroup$ Yeah I am thinking option three is the only real winner but again...its just pretending not to be a currency system. $\endgroup$ – James Feb 24 '16 at 20:00
  • $\begingroup$ yes, or a combination of all three, and even a post-scarcity society would have a lot of challenges when it comes to incentive. Im not for or against any of these ideas per say but I would just like to explore the options. $\endgroup$ – Zailon Xwadastet Feb 24 '16 at 20:34
  • $\begingroup$ Wrong : youtube.com/watch?v=94BtOtGVqLw $\endgroup$ – Euphoric Feb 25 '16 at 12:58
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The typical alternative economy you see in human societies is a Reputation-based economy or gift economy. A person is valued by their reputation, which often involves giving gifts that are nicer or more lavish than what others typically can (or care to) provide.

This is more common in primitive societies that aren't real tight on resources, but there has been a lot of talk lately of people going back to it as a "post-scarcity" economy. It is said the OpenSource community operates on this principle. People are valued in that community based on the amount and quality of what they contribute.

Cory Doctorow's Down and Out in the Magic Kingdom explores the implications of this. His work had a monetary equivalent of reputation called Whuffie. However, his whuffie was effectively a popularity measure, so you don't lose any of it by getting yourself stuff like cars. You just take stuff if you have enough whuffie to justify using it (and of course other people can build up whuffie by making that stuff). However, a person could go from riches to rags in the blink of an eye if they do something very unpopular.

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  • $\begingroup$ Very interesting! Thank you for providing a detailed response, I recall having learned something similar about tribal econ structures in the south pacific. Definitely an interesting concept to explore and thanks for providing references for me to read in further on it. $\endgroup$ – Zailon Xwadastet Feb 25 '16 at 19:08
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    $\begingroup$ Another example of a post scarcity society is Hogan's novel "Voyage from Yesteryear" $\endgroup$ – Sherwood Botsford Feb 25 '16 at 20:13
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Utopian Communism / Utopian Fascism / Utopian Monarchy

Money, is a form of currency. It's used to symbolize what other items are worth. For example, a can of tuna could cost me three pencils and razor blade. Instead, it costs 0,8€ (more or less).

Currency is needed to ease trades, and have a common ground for everything. With that said, why is it needed?

It's needed because we need to trade goods to survive. Think of the world like a supermarket. You and 10 other guys can go to a supermarket and claim one aisle as yours. People stuck in the toy department would have problems because they had no food nor water, however, they have things that are appreciated by others, which can be traded for x water or y meat. The person at the meat section would need water, but since the person that has the water may need meat a fair trade can be arranged.

Problem is with monopolies, the water/meat can essentially dominate the supermarket by being the sole providers. They can even promise 1-2 guys that they'll give them food and water in exchange for protection, and you have a business which works on water/meat as currency.


Why was that important?

Because it's what we have with money. We have companies that control the products we need to survive, and as such we need to provide them with other products (in this case, money) in order to survive.


How would a society function without currency?

In Communism, every person is regarded as an equal, below the state who is above all, with select groups who are essentially the enforcers, who are also above 'the rabble'.

In Fascism, every person is the same, except for the leader, and the enforcers below the leader

In a Traditional Monarchy, there are three major groups, the Nobility, the Clergy and the Peasantry. The Nobility owns land and protects/polices it. The Clergy is in charge of events and exists independently of religion. It's a group dedicated to improve life. Finally the peasantry is delegated with producing for ALL classes. Sure, it may seem unfair, but they're the ones being protected by the nobles and entertained by the clergy

Don't they sound the same?


They do

All three are essentially the same thing, except with different nomenclature. Sure, communism is based on a ruling group while fascism is on a ruling person. And Monarchy is a mess, it's being ruled by a King, but the King has to balance his power between all Dukes/Counts.


How would a society without currency work?

Quite nicely actually. First of, we need 3 things:

  • Self Sustained Land (Does not need to import ANYTHING)
  • Intelligent Population (They need to be logical over Emotional)
  • Knowledge in Martial Arts

Self Sustained Land:

This is imperative because we need to feed everyone, and be able to keep everyone happy.

Intelligent Population

If we have a society with a single leader, and despite everyone being well taken care of, I gather a few people who are greedy and want to rule themselves, then I'll be able to overthrow the leader. However, the rabble I gather won't allow me to simply replace, I'd have to form a system where everyone would feel in control...a democracy*. But then, I'd just be forcing myself to give up control, and I'd have to establish a way to keep everyone happy by creating a way to get power. Power = Resources, so I'd essentially just bring back currency.

So no, we need an intelligent population.

Knowledge in Martial Arts

We need to be able to be able to prevent our territory from being taken (which would unbalance our whole system)


How would it work?

We first divide everyone in groups/classes. We need to have an active military in order to defend our resourceful society. If we lose our ability to not rely on others, we quickly fall down. Defending our sustainability is key.

Secondly we chose a ruler, who will own the title of Sovereign (President/King/Chancellor/Khan/etc). This title is hereditary, except when it's vacated by the sovereign himself (No good Heir) or by a council.

Thirdly we chose the council. Essentially Dukes. Each member gets a district/state to run and distribute resources in. Each council member can also vote out the sovereign / disinherit heirs if they are not found to be good rulers.

Then (4) let's get the counts.. or mayors if you will. Essentially a collectivity below each duke, who rule regions beneath the duke. These would be in charge of distributing the resources to the 'barons'. They should also be the ones in charge of keeping Police.

5th Step. Barons, or Parish Presidents, Essentially ruling a community, and working to improve it.


This is similar to what we have nowadays. In the US (as viewed from an outsider perspective), they have a President (United States), who is above the Governors who rule states (California).Then Each state has a Counties (Los Angeles), who then have cities (Hollywood). In addition to this, there would be parishes who are something common in other countries (essentially it's another tier, below a city, who is ruling over a small region such as a couple of neighbourhoods)


Dynamics

Each County would be in charge of either Manufacturing, Processing, or Development of goods for other counties in the Duchy. One County could be based on farmlands, and a second one on factories who process and ship the goods. If not, the county would be either military or population focused.

Each Duchy would be responsible for ensuring that each County has the ammount of resources needed, and if in lack request from the King. Each Duke should provide surplus to other Duchies in exchange for.. nothing. Note that while this may seem harsh, it's expected for the country, and each duchy to be self sustained, and regions who cannot provide solely for themselves, would most likely be in regions with advanced activities (Law, Research etc), who would then provide services for other Duchies when needed.

Finally, you have to ensure that and most importantly, everything is covered. As long as everyone has an activity to do, and everyone is well taken care for (No Starvation, No excesses and absolutely no unemployment), then any logical person would be content with its life. After all, the only thing anyone else could want is more, however, they don't need more, they would be being greedy, and as such, going against the society.


In the end, you'd end up with a society who doesn't value trades, because as long as they do their part, they will be taken care of. The second the country is unable to provide for itself is the second the society will fall. The people in higher 'classes' aren't necessarily higher, they are simply doing bureaucracy, making sure everyone is well taken care of. It's also why it should be hereditary, as the feeling of ownership not only makes people not want something to be destroyed, but also prevents fights for more power.

And there you go, your little own utopian society


Note:

I don't mean that everyone is only allowed the bare minimum to survive. Everyone receives proportionally to what they need (and a bit extra). Essentially it's like an home...but gigantic. Everyone can get to the pantry and take what they need, if they don't need more they can just return it. Everyone is also able to have a phone, clothes as long as they respect them (Not breaking stuff because you don't have to directly work for it - which is why you need intelligent populace)

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  • $\begingroup$ Nice detailed answer. $\endgroup$ – James Feb 25 '16 at 16:05
  • $\begingroup$ Thank you for a well thought out response, there can be of course much more details etc but youve got a good foundation going. I would also perhaps introduce a direct democracy system in addition to representative governance but that of course is a whole nother discussion in politics, but thank you for such a detailed response. $\endgroup$ – Zailon Xwadastet Feb 25 '16 at 19:20
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    $\begingroup$ The issue with democracy is that it only gives the illusion of choice, and creates icons via the cult of personality. Hitler, Trump, Kennedy, Salazar, Mussolini, Putin. Not to mention that it allows peolpe to trade jobs and gain power over others, which would then defeat it's purpose, because a society that fights within is weaker outside $\endgroup$ – Oak Feb 25 '16 at 20:34
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Given that money was invented very early in the history of civilization because of its utility, it isn't clear that a "non monetary" system is even going to be possible, much less stable.

Given the craptacuar results of command economies and the inefficiencies of barter, someone, somewhere is going to "invent" money in your society. Even in prisons, items which have most of the attributes of money (store of value, fungibility and portability) become money, the most common unit of currency being a cigarette. Other items have been used as currency throughout history, including sea shells, beads and even copper ingots cast in the form of a stylized ox hide (from ancient Cyprus. This effectively meant that a copper ingot was worth one oxen anywhere in the ancient world from Egypt to Assyria).

Perhaps one thing which would change our thinking is to explain "why" your society is "terrified of the possible outcomes of having a monetary system".

Most of the problems with monetary systems tend to revolve around government attempts to manipulate them (from ancient Empires tampering with the amount of precious metals in their coinage to modern governments inflating away the values of fiat currency). IF your society is truly afraid of that, then the solutions are not to dispense with a monetary system, but rather to dispense with government's abilities to manipulate currency.

The post civil war "Free Banking" system prior to the establishment of the US Federal Reserve essentially had individual banks capable of issuing currency based on the bank's own assets and liabilities. The value of the US dollar didn't waver and recessions and even depressions were very short and sharp, correcting clearly as insolvent banks failed and the markets cleared. A modern alternative is "crypto currency" like bitcoins, which have their value assigned through mathematical formula that limits the ability to manipulate their value. There are probably many other historical examples to look at to find a monetary system which isn't as easily manipulated by governments.

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What do you mean nonmonetary system?
There are 2 major uses of money.

A medium of exchange: You are paid dollars which you have no direct use for, unless you really like paper with president's faces on it. But you know other people will trade you other things for the dollars, so you take them with the plan to trade it latter. This was addressed by O.M.'s answer.

A unified bench mark of value: How much is that chicken worth? 5 gallons of milk 1/4 a cow or $50. There are thousands of things in the world instead of remembering conversion rates between any two items we just remember the conversion rates for everything to money.

O.M. Addressed removing the first. You either need a command economy or a post scarcity economy so there is no barter, or you start trading some type of I owe you which then becomes money. The second is also hard people naturally want to figure out relative values and there will be some metric. Number of hours spent in line getting it, how few are produced every year, how long the list of prerequisites is. And that metric will serve the place of money and if it is tradable it can become a currency. The one exception is a post sacristy society where every thing has the same value.

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It would be a case of developing a system where everything is made in abundance and the main point is to develop access to the abundance as opposed to fight for money to get things.

In a resource based economy its technology that moves goods around not money and the people sole responsibility as far as maintenance is to streamline and improve the technology as oposes to finding ways to compete with new products.

In short technology would be the key to a money free society and the efficient tracking production and distribution of goods

Of course it's important to note that in a money free society the cultures of the world would have different values and principles they live by, to redesign the monetary system is to also reprogram the people

Hope this gives food for thought :d

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We like to put a value on everything. This currently means that we put a price on everything, especially your time and skills.

Non-money based systems:

  1. Pre-Tech hunter gatherer
  2. Barter
  3. Post scarcity for everyone
  4. Post scarcity based on slavery
  5. Common ownership of everything (true communism)

Hunter Gatherer

Kill it, find it, make it, eat it. Do I really need to explain this one?The ultimate in consumer goods is a roof that doesn't leak. There's nothing to buy so no money. (There's probably still prostitution.)

Barter

Fundamentally limited in its usefulness as it depends on the person who has goods you want, wanting the goods that you have. In general that's not a long term viable system and suddenly you end up with money.

Post scarcity for everyone

The great Star Trek society, except it was never non-monetary outside Starfleet so this really goes to 5.

Post scarcity based on slavery

You weren't expecting this were you. It actually works in a way, not a way the majority of people are going to like, but it works.

People who don't matter, i.e. slaves, have everything supplied for them by their owners. They have no freedom, true, but they're (theoretically) not suffering for it. They just have to work the day for no money, get fed, get a home, have relatively normal lives (with permission) bringing up little baby slaves and not worrying about anything much. These people could actually be better off than the serfs were through most of the middle ages up to the Russian Revolution.

People who do matter, the masters, have to worry about larger matters, like politics and trade, but on the whole their estates should generate everything they need, hence money becomes irrelevant. Society also becomes technologically stagnant, but you didn't ask that.

Common ownership of everything

Communism doesn't work! I hear you cry, well actually it does. It doesn't however work on a national scale or for very large groups. The classic example is the Kibbutzim in Israel.

As long as everyone maintains that very socialist pioneering spirit, joy of living in a commune and working together of the hippy generation it works. From the outside it looks much like (4), most members of the commune get what they need, work all day for no money, get fed, get a home, have relatively normal lives bringing up little communists and not worrying about anything much.

There will be administrators whose job it is to trade with other communes/estates to get the resources not generated by the one they live on. This could be done by barter as they should be generating multiple products between all their (of course highly skilled) communists.


In fact you could have a society of mixed blocks of 4 and 5 and the insular nature of each one looks the same from the outside and they'd be able to trade between them. However the quirk of making these work safely requires a highly agrarian rather than industrialised society i.e. generating all your own food and not actually dependent on trade for survival.

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