Sunday, December 4, 2011

What If: Gift Money

When you buy something at Canadian Tire, you get some "Canadian Tire Money," which is basically a small reimbursement to try to promote customer loyalty. I've never bothered to save mine to use later (it's usually only a few cents), I just put it in the big bin they have at the door for donating it to some cause instead. This caused me to have a weird thought on the subway the other day: what if money (or a certain proportion of our money) could not be spent on ourselves, but could only be donated to a cause of choice?

What if, instead of an economy where we used the money we earn to purchase goods and services that we want, that by the very exchange of the money transfers possession of those things to us in a quid pro quo...instead we had an economy where our money (whether wages for labor, or profit from owning a share of the capital, or rent from land, or something else like the Social Dividend) could only be donated to various "causes" which then produced their corresponding goods to be freely distributed.

This would be equivalent to using our money as a sort of impersonal "vote" about what should be produced by society (with no guarantee that we ourselves would be a beneficiary of what was produced unless the overall proportions of the distribution worked out that way.)

In other words, where we gave our money to various firms based on what we wanted to see produced (but without that vote, in fact, giving we ourselves a title to those things). Perhaps, once the votes about what should be produced are in, the totals are then distributed equally or something like that.

I'm not proposing this as a workable economic system necessarily, don't get me wrong (though I don't think this idea would necessarily conflict with my support of the Social Credit monentary reforms). In fact, it is unclear what incentive people would have to work any more than anyone else in this system (unless somehow the various producers considered how "generous" you were when determining your allotment).

But I did have to think that, in such a system where we were voting on what we wanted society to produce generally without bootstrapping our vote to our own obtaining of those goods...probably a lot more production capacity would shift onto necessities of life rather than superfluous consumerist goods.

Now, classical economists would probably tell us this system (even if people did have an incentive to earn more) would be incredibly inefficient because, they'd say, supply should be dictated by demand. And yet, wouldn't this be a way of expressing a different, and more altruistic, form of "demand"? Specifically, it would force us to consider what we want to be produced in general as opposed to just for ourselves. It would render the expression of our economic desire communitarian rather than individualist.

When you have money to spend on yourself, you might buy some ridiculous big-screen TV. But if you could only donate your money, essentially voting on what society should produce without any guarantee of obtaining one yourself, would you vote for "big screen TVs"?? Or would you, more likely, vote for necessities like food and productive "humanitarian" things? Wouldn't you probably in such a situation put a little more of the total into, say, food production "just to be safe" to make sure society produced enough (for you and others)?

In a sense, spending is a "vote" in the free market for what should be produced. But it's a vote we're also "bribed" for because by making it we, in fact, are given the good. "Vote for resources to be allocated to our production and we'll give you a cut in the form of the very good produced!"

But if we all had money (or at least some money) that didn't work that way, that we couldn't spend on ourselves but could only "donate" (in order to produce goods which could then only be freely distributed according to some system), I tend to think the causes we'd donate to (equivalent to saying: the forms of production we'd "vote" for) would be very different than the ones we choose when we're spending on ourselves.

This sort of reminded me about the idea of a "gift economy" (albeit in a more complex, and impersonal, institutionalized form) that does not have quid pro quo.

Just a weird little thought I had.


musicalguy said...

Interesting idea, Mark. I don't think it's unworkable in any way. However, it would eliminate the one thing that makes the economy work at the present time, i.e. credit. In the model you propose, there would be no room for credit, and therefore, no way for people to spend outside of their means. All the superfluous stuff would have to go by necessity because most people that purchase those things do so on credit, and under your system, that just would not be possible.

The other thing that comes to mind is how to make the votes equitable. It would give the wealthy a greater advantage than they have now in controlling the marketplace. It seems to me, on the surface, that those with greater income to vote would have an unfair advantage over those with a little money to vote. I guess it's probably no different than what happens now, but it strikes me as being much more skewed to the wealthy than our current system.

It's definitely good food for thought.


A Sinner said...

Well, yes, the wealthy would have more of a vote inasmuch as they could "donate" more...but that doesn't mean they'd get more of the goods.

My point in this hypothetical was that if we had to vote for what the economy would produce IN GENERAL, but in a way that did not translate into us personally getting any more goods ourselves necessarily, we might "vote" differently than when our "vote" (ie, our spending) guarantees us a possession of the product voted for (ie, bought) in a quid pro quo arrangement.

Credit is necessary (there's really no such thing as "living beyond our means;" if the product is was within our means, by definition), but it should be Social Credit rather than private debt-credit.