Island Economics

Island Economics is a fun way to kick around otherwise unreal ideas for some real value. Explanatory value or alternate model value.



The following was taken from "Understanding Modern Monetary Realism" written by Cullen Roche.

"On a journey around the world with members of the US Navy we become shipwrecked and find ourselves on a beautiful island...…...  I issue “reserve” notes and initiate an electronic system that tracks each citizen’s transactions……. "

Cruising on into fantasy:

The "reserve notes" are not paper but virtual shells on the central computer.  Each virtual shell has a unique distinguishing mark (serial number) and denomination of one shell.  Islanders trade one real shell to get a virtual shell in the i(sland)Cloud floating over the island that they worship.  This establishes the system.  They also receive a unique identity and iPhone 4s with near field capability and biometric owner identification ability to verify owner association and authorization to use of device as well as identify and verify paying and receiving owner in a transaction.

This is what happens when a transaction takes place:

Virtual shells do not move from the account of one owner to another in the iCloud, The identity of the current owner of each virtual shell involved in the transaction changes.  Previous owner identity goes into history.

The virtual, marked shells exist forever.  Owners do not.  The base record is the one that lasts the longest.  The fixed, center, constant virtual record of the money system becomes the money unit.  The center record is not really the the holder of the money unit but it could, for viewing purposes, be presented that way.  All money is associated to some holder. 

Islanders stored their old shells in their own houses and still like to see what how many shells they have, even if virtual.  A user view is created for them that presents the total number of shells bearing their unique identifier.  They could also look at all the shells and their unique identifying marks and who the last previous owner was to be sure the system is not playing a shell game.

You, as shell system manager, are primarily concerned about the integrity and security of the money system because you will be exiled if your money system does not work as promised or if there are ever two shells with the same identifying mark or two identities on the same shell.  The system would allow multiple identities to combine into one but that is a subsystem support model.

From this simple system model structure an elaborate system could be built.

It is scalable.  That is an important thing in system value.  Extensions can be added.  It is a monetary operating system on which to base all application use.

It is also open source and transparent, anonymizing ownership depending on view authorization.  It produces total monetary system management information when associated to all things bought and sold.

Various denominations of shells would be introduced to minimize transaction overhead so that one shell with a denominated value could represent many shells.

A beautiful place to vacation, which introduces the money exchange problem……….

Actually, there was an island with stones as money to big to move but everyone knew who owned them as they changed ownership in transactions.  The original "fixed" record.  Then there was the stone that fell off the boat while being carried from one island to the next……….

Maybe the whole idea is as old as stone…