Perfect Money Foundation

TPM (Theory of Perfect Money) .

What is the Theory of Perfect Money ?

TPM (Theory of Perfect Money) is an idea of how money should be in order to create a just civilization that is able to maximize its productivity and its efficiency. TPM answers questions such as:

How much money should there be?
How should money be created?
Who gets the money that has been created?
What is monetary inflation?
And other things such as denominations.

Included in this are some very new ideas including what it should be in terms of its confidentiality, availability and integrity.

TPM is a "Normative Philosophy" and a moral philosophy that prescribes what actions we people should take to be good and moral. As a moral philosophy, it is extremely important we understand that this is only a theory and has yet to be shown to work in practice. No one should think about forcing everyone to obey rules set out here and I can guarantee that some of my thinking here will change with new information.

Universally Preferable Money ?

How do you like your money? Do you like to lose it? Do you like to have it stolen? Do you like it only to be usable Monday through Friday between the hours of 9am and 5pm at the General Store and only to buy certain products? Do you like it to be heavy? Do you like it when it goes down in value? Do you like it when your purchases are posted on Facebook so that everyone knows how much money you spent at the medical clinic? Do you like it when everyone knows how much money others gave you, who those others are, why they gave it to you and when? Do you want everyone to know how much welfare you receive, taxes you paid and how much taxes you did not pay? Do you like it when someone else says that they are you and buys things for themselves using your money?

I have yet to do a survey, but I would bet that most everyone in the world who uses money would have the same answer: NO! That's why these preferences are universal.

But there are more questions :

Do you like it when people are able to steal from you without you being able to detect it?
Do you like it when the government taxes you without you even knowing about it? (Taxation without representation)
Do you like working so hard only to find that you cannot purchase the things that you were working for because the price has gone up so much that now you can't afford it?
Do you like it where there is tension between races, sexes, rich and poor because the monetary system creates injustice and inequality by favoring people who get newly printed money?
Do you like it that people who should not be able to buy anything can live in mansions while those who should be able to live the good life struggle to feed themselves?
Do you like it that the well-being of generations is being wiped out?
Do you like war in which everyone is worse off at the end or dead?
Do you like it when the government gives trillions of dollars to rich bankers so that the government doesn't go broke because of their own stupid decisions?

If you answered 'No' to all these questions, then congratulations, you are a human and now you have been introduced to the theory of "Universally Preferred Behavior." The TPM explains why these are all big "Nos" and what we can do about them.

Do We Even Need Money ?

I hear it all the time: The future will be like Star Trek and they don't use money. Or, we will have a "Post Scarcity" economy. Or a "Resource Based Economy" and we will not need money.

At minimum, we need to feed ourselves and our children. Essentially, we need an information system that will allow us to collectively figure out what job each of us needs to do to collaboratively put food on the table. But this seems like an easy enough task. Why don't we just take the food that is grown and divide it among us and we can all eat? Ok, but our population is so large that it requires nearly every acre of arable land to feed the millions in our cities and that requires fertilizer, tractors, trucks, and farmers. Okay, then we will assign someone to make the fertilizer and some other people to make the tractors. Yes, but fertilizer needs to be created in chemical plants and those plants need metals and materials that must be mined. So, we need mines and mines require mining equipment and people who know how to operate it. So, we need schools for farmers and miners and that means we need a college and that needs to have light bulbs to light the rooms and … dang, a million other things.

Our food system is based on technologies that are based on other technologies that create a pyramidal-web of dependent variables.

If we are to have more than a few million people on the planet, we need a way to organize ourselves so that everyone is productively and efficiently creating something that will contribute to putting food on the table and so that everyone is conserving what they have and that the food is distributed to everyone and not left to rot.

All that work just to feed ourselves. But we would also like to live in houses, have some fun and go on trips. Okay, now we have a huge number of other jobs that are needed.

We tried coordinating all these activities with a central government (Communism) but it didn't work! Forty-seven million people starved in Communist Soviet Union's Holodomor Famine. Communist China lost 50 million to starvation and these are just the worst. With command economies, you can forget about quality housing, entertainment, or vacations in Florida. You will be lucky if you are treated better than a pig who is never let out of its pen.

But, what about the Spartans of Ancient Greece? One of them came up with the idea that they could all be equal. But then the question was asked “Who will do all the work?” The answer: The slaves of course! The Spartans enslaved tens of thousands of Helots who did all the work needed to keep the Spartans fed. Soon, we can do the same thing, except replace slaves with robots. With robots, there is no moral downside. There are potential job losses that we will talk about later in this book. Still, there is no decision support system better than money.

Capitalism: Decisions Based on Information, Numbers, and Math .

Monetary systems are information systems and they give us information that we need to become productive and efficient to make a living and have a family. Money does this by giving us actionable information. What should you do when you wake up in the morning? Money tells us to get a job so we can buy food and eat. But what job should we get? Money tells us to take the job that pays the most because that is most likely the job where we can produce the most value.

What food should we buy when these gallons of milk and cartons of eggs look identical in the store? Money tells us through the price of the products which one was made the most efficiently, and we buy the cheapest. This is an oversimplification but it makes the point that money is our system of mass coordination.

Without monetary systems, our nations would implode because no one would know what to do. If some great force, such as a government, was to meddle with this system, they could cause people to do a lot of incorrect behaviors as has been shown historically.

Progressives have tried other systems like Communism. The Soviets had hordes of economists who would figure out how much of each product their economy should make and how much of a price those things should sell for. They decided who did what job. We have “been there and done that". Communism performs much worse than a free market economy with a good monetary system.

A major problem for authoritarian systems is that everyone has their sense of “value” and not even authoritarian systems are able to know what people want at any given instant. Thus, Communism can never give people what they value, only what the authority thinks they value or what the authority thinks they should value.

But can't we just have a quantum AI computer tell us all what jobs we should do? We could just check our computers in the morning and be told what is the best action for us to undertake. It would tell us where to work and what to buy. Maybe this system would be so efficient that we would all have awesome lives?

Myself and many others have concluded that General Intelligence AI is dangerous and should never be created let alone allowed to run our economy. It is fine if each of us has an AI program that helps us make specific decisions. But there is no theoretical way that we can create a Super Intelligent AI without it threatening our existence. And, according to some science fiction, such as the Terminator movies, AI may make the decision to destroy us within seconds of becoming self-aware. This means we should not create AI that is conscious and any AI that would run our economy would certainly be conscious.

With super intelligent AI, we will have the problem that AI will not know what you want every second of the day and what you value at any given time. Instead, it will have you do what it wants so it can achieve what it values. Besides the danger of AI, it is still unlikely that a quantum computer would be able to match the computational power of seven billion human brains working in parallel, especially if each has their own quantum computer.

Money forces us to economize. We only have a certain amount of money so it limits what we buy and encourages us to produce more. Authoritarian systems have found other ways to limit what we can buy and encourage us to produce. They can put us in gulags, feed us the bare minimum rations and threaten us with death if we don’t work. Not only do they make our lives hell, they also do a poor job at creating an economy that can even feed us.

Overview of TPM .

There are general principles of TPM and each of which can be broken down into several subcategories.

The major categories are :

Confidentiality
Availability
Integrity
Preferences
Principles

Overview of Confidentiality .

When Facebook said it would join a Consortium to create a new currency, everyone was so alarmed because it was seen as a threat to privacy. Privacy is something we may not think we need, but in fact it is crucial. Also, we may think that we need privacy but others do not. The Philosopher Ayn Rand once said that "Privacy is the movement towards Civilization." I agree.

Evaluation Criteria for Perfect Confidentiality :

A monetary system should not reveal a money's owner.
A monetary system should not reveal a money's location.
A monetary system should not reveal a money's change of ownership.
Users should not have to authenticate themselves to use money.
A monetary system should not record money use.
Must be impossible to know if a person owns money without their cooperation.
No person should be able to force another person to become the owner of money.

Overview of Availability .

Ever go to use a debit card and even though you have huge amounts of money in your bank, your card is declined? There are a million reasons why your money can become unavailable. Meteor strikes, hackers, government intervention, or bad computer code. Our money needs to be able to survive all these and keep working.

Evaluation Criteria for Perfect Availability .

Money should be able to be exchanged at any time.
Money should be able to be exchanged over any distance including to other planets.
Money should be able to be exchanged with no measurable expense or fees.
The time it takes to willfully spend money (change ownership) should be faster than perceptible.
A monetary system should be able to serve all the users of the system in parallel without slowdown.
A monetary system should have no systemic risk of failure.
A monetary system should be easy to use so that it is available to low-tech people.

Overview of Integrity .

Imagine that your bank balance dropped from $100,000 to $10,000 because of a computer glitch. Or, your kid was able to withdraw $90,000 without your permission. Or, your bank thought your money belonged to someone else and gave it away. This can happen if our money does not have integrity.

Evaluation Criteria for Perfect Integrity .

All Money must have an owner and no money can be lost.
Money should be impossible to steal.
All Money should be storable on any media including the human mind.
Money should not reference some other thing of value (like a silver certificate).
No one except the owner of money should be able to change the owner of the money.
Low IQ people should be able to understand how the money works and make decisions based on the information.
Money should be made of the same stuff and be completely fungible so that every equal unit is worth the exact same as another equal unit

Overview of Preferential Integrity .

What denominations should a cash system have? 1s, 2s, 5s, 10s, 20s, 50s and 100s like the US dollar or, 1s, 10s, 100s, 1000s, and 10,000s like CloudCoin digital cash? Should our money have fractions or just use whole numbers? What level of precision should we have? Should a gallon of gas cost $.345, $3.45, $34.5 or $345 in nominal terms? There may not be a perfect answer to these questions.

Evaluation Criteria for Perfect Preference .

Take up very little space and require very little bandwidth to transfer.	Separate data from logic.	Cross over from virtual reality to reality.
Be "Turing Complete" usable by any programming language.	Able to work within customary legal frameworks.	Able to work within current merchant and payment systems.
Be able to be deposited into banks.	Be able to be used to fund investments.

The TPM Model - Components of Money .

Another thing to introduce here is the concept of "components" within a monetary system. It is common for information systems to be modeled in components to facilitate development.

Here are the TPM components :

Component	Description
Physical Media	Paper, precious metals, plastic, nickel, copper, hard drives, USB drives.
System Administrative	Minting, ownership, denominations, encoding, anti-counterfeiting, destroying.
Data	Inks, embossment, writing, magnetic fluxes.
User	User interface, user preferences, usability.
Transportation	Armored trucks, email, Internet, satellites.
Application	Banks, credit cards, checks, payment systems, investments.

Banking systems may seem to be part of the monetary system but they are really a layer that floats on top of it. The TPM only deals with the first three layers, the Physical, Administrative and Data. The other components fall outside of this theory.

HERE IS THE FIRST THEORY OF PERFECT MONEY