In a prior blog entry I examined the "what if" idea of an island state establishing the monetary system I propose where digital dollars do not move from account to account. The dollars are a static record and only the account to which they are related by ownership changes to always have a relationship to current owner.
The idea is not new. Here is the story:
There was a remote Paradise Island long ago. The island money was big stones. The big stones were to be found on Big Stone Island and a voyage to get them was perilous. The stones were heavy and kept in the front yard of the islander that owned them. Using them as a medium of exchange required that the buyer of a good or service to carry a big stone to the new owner's front yard.
There were just enough big stones on the island to assure full employment and no inflation.
Men did all the lifting and carrying of big stone money. Women on the island were smarter than the men and valued a strong but dumb husband. Women did not carry big stones. The in joke amongst the women was that their man was as strong as the ocean but dumb as a big stone.
Men never got the joke. However, one day a bunch of guys that were filled with the local island brew were all complaining about bad backs as a result of all the big stones they had to carry. Being able to solve all the islands problems in this condition, which they called tribal council, they came up with an idea to cut their lift and carry work of paying with big stones in half. They would use a small stone with a different mark on each side, throw it in the air and the loser of the toss would transport the stone to its new home yard.
The women laughed. The men did not get it but the women loved them so they allowed men to think they were so clever. The men wondered why their back aches did not go away.
Trade was good on the island but the women stopped laughing as more and more men had such bad backs from carrying big stones they could no longer dance and make love. This was a real problem! They all knew the best solution to a problem was a woman so they got together to solve it.
The women saw that each big stone in the yard was unique in size and shape. Everybody knew who owned it by whose yard it was in. Instead of moving big stones from one yard to another they would simply know who the big stone in their yard belonged to at any given time. A simple system was set up to do this and they did it. The meeting of all the island women to decide this solution took about 5 minutes.
Over time all the men's backs became well again. They danced and made love. They also elected a woman as chief of the island. They were not so dumb after all.
There was full employment and no inflation on the island and they always had as many big stones as they needed. The population was growing because there was a dancing and making love bubble. More big stones could be gotten from Big Stone Island anytime they wanted them to satisfy the needs of a growing population. The voyage was still perilous so they only got as many big stones needed to satisfy the requirements of continuing trade consistent with a growing population and full employment with no inflation objectives. They did not need more big stones than necessary.
On one return voyage of finding and transporting a big stone to add to the Paradise Island money system (it was to become the biggest stone) the size of the stone and the high waves of the sea caused the boat to capsize and the big stone go to the bottom of the sea. This all happened in view of all the islanders on the beach gathered to greet the arrival of the new big stone.
There was wailing and weeping amongst the islanders on the beach for the loss of such a big stone. The woman chief of Paradise Island caused the wailing and weeping to cease with a song. She sang: We all saw the big stone fall out of the boat. We all know where it is. We all know the family that was to own it because it is the new big stone in honor of their new baby. The big stone has not been lost. We all know where it is as sure as if it was in a front yard.
The islanders all agreed with the wisdom of the chief. Nobody could see the big stone from the beach. They all knew where it was and who it belonged to. The new owners of the unseen stone at the bottom of the sea said to everyone on the beach that they would give ownership of the sunken big stone to a neighbor who would build an addition to their grass shack for the new baby.
A couple of the island men went down with the big stone trying to save it. The woman chief said that men would no longer carry big stones from Big Stone Island risking themselves at sea to bring them to our front yards. Everybody knows the big stones are on Big Stone Island and they are not going anywhere.
The islanders no longer went to Big Stone Island. It was not a lovely lush place like Paradise Island. Just a bunch of big stones. However, since the big stones were on Big Stone Island and did not sit in front yards anymore and have distinguishing characteristics of size and shape they gave unique names to the big stones on Big Stone Island so they could tell one from another located there so the seller could identify the stone of Big Stone Island to the new owner of the stone.
Every year the islanders had the biggest celebration on the island at which they recited all the names of big stones on Big Stone Island that had been named and inducted into the monetary system and their current owner. If there was any disagreement among the islanders about current ownership of big stones in their front yard that were no longer moved around or the new stones on Big Stone Island that had unique names both islanders were sent to Big Stone Island to remain there until they both returned with a settled agreement.
After a few years only one and sometimes none of the exiled islanders returned from Big Stone Island. Population was decreasing. The woman chief of the island decided that if there was any disagreement about ownership of stones on Big Stone Island the disputers did not have to go to Big Stone Island. They would have to go back to the old way of doing island business in all of their trading by carrying big stones to and from the front yards of everyone that they traded goods and services with until the dispute was settled. Settlement by stoning of one disputer by another was not allowed. In that case the survivor would be sent to Big Stone Island and have all the un-named stones they wanted.
Paradise Island where all the men were strong, the women were smart and all the children has a big stone on Big Stone Island with their name on it.
Old big stones remained in front yards and were never moved about. Their presence was an reminder that the island people must always be smarter than moving big heavy stones around in order to live happily. They really traded in ideas of stones associated with unique identities of stones.
When the missionaries arrived to teach the glory of debt based money system religion they did not understand the island way of doing business and condemned its practice. They loaned money to the islanders and charged interest and wrote down numbers that were names of things that did not even exist beyond a made up number. The islanders thought that naming things that do not exist is a strange practice. The missionaries thought that giving names to stones on another island was a heathen practice.
Then the missionaries took away all the big stones from front yards on Paradise Island because they were shiny. The islanders of Paradise Island simply gave a name to a new big stone on Big Stone Island for every old big stone the missionaries took from their front yard. Even the men laughed as they watched the missionaries breaking their backs carrying the big stones to their ships. Missionaries did not dance and had to make love in only one strange position because of their bad backs. Big stones in the front yard were only things to trip over in the dark anyhow.
Unfortunately, missionaries removed all the big stones from Paradise Island but the missionaries did not go with them. They stayed and opened banks and imposed a new monetary system. A system where money was nothing else than a number with no unique identifying characteristic to make it any different from any other number except in quantity. Furthermore the number represented what was owed ultimately to the bank.
The islanders were mystified. Big Stones live forever. They are something to count on even if they are only names of big stones on a distant island. Nobody had to go to Stone Island anymore. If the island sank into the sea like the big rock once did the unique names of all the rocks would still exist. Numbers called debt were born with a loan and lived for awhile as a thing called an IOU and then died as the debt was repaid in a perpetually repeating cycle. Any quantity of debt numbers can be created at will. Unique identity was so elusive that games could be played with the debt money. Nobody knew what it really was.
The islanders did not like the new money system and the bankers. They threw the missionary bankers and their debt money off Paradise Island. They returned to the old system, danced and made love again. Paradise was restored.
Even the men of the island thought it was as stupid to move money as it was to move the big stones the missionaries took away. All that has to change is the ownership of the money.
Money does not move any more than the big stones of Big Stone Island move. Only ownership of the thing changes. In order to do that money must be a thing with unique identity not just a positive total number equal to a negative number where creation of a negative number gives birth to a positive number.
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