Money supply

Further to my previous post about the gold standard here, I made a similar point on Facebook alongside a slide published by positive money. I got a reponse - thanks - which I have posted below, interspersed with my further responses:

• Surely the number of people alive is as arbitrary as the amount of gold that has been discovered!

 Not at all. Gold has very little direct use in improving the quality of human life. It's good as an electrical conductor, but I'm unaware of any other day to day use. If all the gold in the world vanished (except what is in practical use) we would be no worse of so far as health and well being were concerned.


I was looking fo some measure of the quality of human existence, or our ability as a society to protect and preserve our own species. Whilst a long life isn't necessarily a good quality life, it is a reasonably good proxy - if you're healthy you live longer. If there's no war, hunger, disease etc, people live longer. It then occured to me that if people lived longer there would be more people alive at any one time, so perhaps population rather than life length would do.

• One third of all the worlds refined gold is kept in one place - around the necks of Indian women. Scott's approach would make India rich!

Depends what you mean by rich. You can't eat gold, you can only exchange it for something that actually sustains life - nutrition, shelter, safety, health care to start with.

• How could we be sure that India, having one of the largest populations, would get it's fair share of the money that is created under your suggestion, any more than it does under the current one? 

My proposal is about money supply, not about its distribution, fair or otherwise. As we know, currently nearly all money is created by banks and lent out at interest to whoever the bank  wants to lend it to to make a profit.Obviously money supply needs to go up and down - but we need sound reasons for that.

Perhaps the Indian Government (or any other government) would be able to create the money that corresponds to India's population, so it would have the money and it could spend it as it chose. What we would have to decide is how many money creating authorities there would be. For example, if the UK created some its per capita money, then England, N Ireland, Scotland and Wales couldn't also do it - this would be double counting.

•  Also, wouldn't it encourage countries to inflate their population?

As population increased there would be more money, but more people too. The amount of money per person alive would stay the same.  Therefore, what you would have to do is be as efficient as possible with the money you have in order to allow population to grow naturally and live longer. I would guess that would involve 'prevention is better than cure'.


What underlies your question seems to be the tacit assumption that more money is better. We are brought up to think/act like this, but what is in fact better? Better health ( longer life) and more happiness (which may be the same as better health). 


The only way to cause population and longevity to rise is to manage physical resources in order to achieve more and longer lives per unit of  resource.

• The Greens wouldn't like you.

The planet can obviously only support a finite population. All the greens are pointing out is that our consumption is currently unsuatainable over time. With the current system we are wasting the planet's resources  and also not distributing them at all fairly. Yet we keep creating more and more money. If we managed the planet's resources properly and fairly we would be able to sustain a greater population than we currently can. We should not equate comsumption with quality of life.

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 Addendum - what is gold really useful (non aesthetically) for?


1) Its electrical conductivity cf its corrosion resistance makes it useful in electronics
2) Its reflectivity of radiation so for satellites and space suits.
3) Its transparency when thin enables it to be used in heated windscreens in aviation.


Thanks to Wikipedia for information.