The World Beyond Capitalism

Part 3 of a 3 Part Series: The Currency Paradox

A New Idea Addresses Some Old Problems

The chron was conceptualized to solve the biggest problem in Capitalism: labor costs. Controlling labor costs to maximize profitability has unleashed the forces of Capital against the world’s population. Globalization is a direct result of capital institutions’ need to control costs and undermine the bargaining power of workers in developed regions by creating competition with workers from less developed regions. Implementation of the chron will eliminate labor costs for Capital because people will essentially pay themselves through their effort. It will also eradicate the exploitation of workers in developing regions. The chron will enable people from all regions to be paid to a common standard. It will immediately lift the standards of living for billions of people and facilitate the transformation of our world into one in which the benefits of modern civilization can be enjoyed by all.

Right about now, critics are probably foaming at the mouth or simply incredulous at the idea of paying people in their own time. “Sounds like another crazy socialist idea,” is probably the thought. “If we pay everyone with their own time, then everyone will essentially be paid the same amount relative to how much they work regardless of what job they perform, right?”

Yes… and no.

Not One Money, But Two

The issue of taxation always brings into question for whom and at what rates would it be most fair. Should the rich be taxed more? Are the non-rich shouldering their fair share? The chron answers a couple of interesting questions regarding taxation. The first one is: what is the fairest way to tax earned income?

The answer is: You don’t. Ever.

Everyone owns their own time. To place a tax on something that fundamentally belongs to the individual can only be considered theft. If I turn my time into productivity and thus currency, society already benefits from my efforts; what right does anyone, particularly a government, have to claim any portion of that? Only the threat of force makes such a proposition remotely feasible. In this respect, libertarians are correct. What is earned as a result of a one’s effort should not be able to be claimed by any other entity. In other words, taxation on income that is earned, particularly if it is in a currency like chron which is simply a validation of something which already rightfully belongs to the individual, is fundamentally criminal.

That’s great! So that nips the whole taxation thing in the bud, right?

Actually, no. In the world of the chron, taxation will still be very necessary. So how would taxation be handled in a “chronist” economy? Like fiat currency now, not all chron will be earned. Many will be acquired as a result of exchange for goods and services or investment returns. Chron acquired in this fashion would be taxable as they were created as a result of passive rather than direct effort. However, unlike taxation in its current form, taxation of chron will serve a specific, critical purpose, which will later be examined.

So, there are actually two kinds of money in the world, that which is earned through work and that which is accumulated through exchange. Chron which are earned are called “eChron” as in “earned chron.” Chron that enters into the process of exchange are called “xChron” or “exchanged chron.” The chron life cycle involves two main processes: the first is the creation of chron through work and the second is the exchange of chron for goods and services.

The basic premise of the chron from a taxation standpoint is that any chron which is earned as the result of work, or eChron, should never be taxed in any way. A person’s time belongs to them; the idea that any entity can claim another’s time as a tax is anathema to this premise. However, once eChron have been exchanged for goods and services, they become part of the greater exchange economy and thus are converted to xChron. In the exchange economy, profit acts as a tax on the consumer by creating a surplus which is claimed by the provider of goods and services in most commercial exchanges. As profit is the net of revenues minus expenses, there is no effort truly associated with it. The best way to describe profit is “a convenience tax,” a determination of value and demand for payment by the provider of goods and services simply for having conveniently provided those goods and services. This is not necessarily a negative thing as profit acts as the incentive that drives the market economy.

However, profit is, for all intents and purposes, “free money”; it can be used in many ways, from making business improvements to increasing incentives to rewarding investors. However, in an economic environment featuring the chron as currency, the major expense of labor is eliminated, greatly increasing profit potential. Since chron represents actual value as opposed to potential value, ensuring their responsible use is essential. To prevent irresponsible accumulation and encourage responsible use, taxation can be very effective. As the chron in the economy accumulate, taxation may even become vital to their guaranteed productive use in society.

What’s important to understand about the chron is that its use does not preclude the profit motive. Unlike the bartering and pseudo-bartering of other time-based currency systems, the chron is actual money. It can be utilized exactly like fiat currency and is perfectly compatible with current models and methods of trade, commerce, and investment. In other words, the chron is perfectly compatible with market-style economics. For example:

Regarding the earlier “socialism” question of people essentially being paid the same amount relative to how much they work regardless of what job they perform, the answer was both yes and no. The chron is an elegant solution because everyone will essentially make the same amount of earned chron for their work, regardless of what job is performed. So, both the doctor and the janitor in a hospital will make the same number of eChron if they work the same number of hours. Salaried workers in any discipline will make the exact same amount of eChron if they have negotiated the same work week in hours (note: the chron can be applied to both wage- and salary-based compensation models).

However, people with skill-sets in higher demand can be compensated with additional xChron which would come directly from the revenues of the organization hiring for the skill-set. For instance, while a doctor and janitor will make the exact same 2,400 eChron over a forty hour work week, the hospital may choose to compensate the doctor an additional 1,200 xChron per week for a total of 3,600 total chron per week. The chron system has a built-in fail-safe to prevent excessive supplemental xChron compensation because all xChron are taxable. Taxation on xChron can be applied in a variety of models tailored specifically to address overcompensation or over-accumulation.

The chron is the ideal currency for a market-style economy. It is far superior to fiat currency because it fundamentally makes markets smarter.

Smarter Money

What if, rather than selling you an item for $5, I sold it to you for 5 minutes of productive effort? Wouldn’t that type of transaction create a more intimate understanding of the relative value of the transaction? Wouldn’t it allow you to have a greater understanding of the exchange relative to the time and effort required to complete it? For example:

If I loaned you 500 xChron and charged 24% interest, would you feel comfortable repaying back an additional 2 hours of your time and effort on top of the 8 hours and 20 minutes required to repay the principal of the loan? What if the interest was 99%? Also, extending the loan itself requires little effort; however, it will, in the best scenario, take about a business day of actual work to repay. Would you say that you have a better understanding of how the debt directly impacts your time and effort?

In our current economic system, it is difficult to correlate money to time and effort when it comes to resolving debt. Money is an abstraction that prevents a true understanding of value because it is an inherently poor measure of value. In other words, money is a particularly dissociative concept because it isn’t worth anything in and of itself and only arbitrarily measures value for any given circumstance. So, borrowing money often doesn’t seem like that big a deal.

However, the figures mask the real burden of debt. Using the example of the $500 USD loan at 24% interest, a person making the worldwide average of $18,000 USD per year with 15% disposable income would need to perform roughly eleven weeks of productive effort to repay the loan. In this instance, the loan represents almost three months of time converted into productive effort.

When you think of it from this perspective, it’s clear that, when you are given a loan, you are actually being “advanced” your own time. So what then does the interest on that loan represent? It is basically a tax on your time and effort; it is the time and effort you give freely to a creditor for the convenience of converting the time and effort you already own into a fungible asset called “money.”

So, what could be considered a “fair” amount of interest on a debt? Historically, the act of collecting any interest on debt has been considered a negative practice called “usury.” Usury was considered to be an unethical practice that indentured or even enslaved those in debt by saddling them with an interest burden that was excruciatingly difficult or even impossible to repay. It’s difficult to determine in any given circumstance what a “fair” amount of interest on a loan is.

However, the chron creates a direct correlation to time and effort that allows individuals to have more useful information in any transaction. When you know exactly how much something costs in relation to your own time and effort, you are more likely to make better financial decisions. The chron also exposes the predatory nature of compound interest; would people tolerate a tax on their time and effort that compounds?

By having currency directly correlate to time and effort, people will be able to make financial decisions with a better understanding of their ramifications. The chron significantly reduces the need for people to have extensive knowledge of finance to effectively manage their own money; it allows for a perpetual real-world understanding of how all financial transactions entered into by a person will affect that individual in time and effort.

Health is Time

As previously stated, the chron allows a level of precision in economic mathematics that would be unprecedented. The move from multiple currencies that are valued subjectively and arbitrarily to one that is objective and precisely measured will allow very detailed insights into work, standard of living, and enterprise, the likes of which have never existed in economic study.

The chron is particularly useful when it comes to value-setting and pricing models. Setting prices with fiat currencies is by its very nature grossly imprecise. From resources and materials to labor, all facets of determining value with fiat currencies are arbitrary as a result of being set by markets. However, almost all facets of production can be measured in time with strong correlation to effort; complex or inefficient methods of production or productivity will generally be more time intensive while the reverse will be true for highly scaled and efficient methods of production or productivity. For the most part, setting the value for products or services is a simple equation of time invested in production or effort plus profit denominated as chron.

However, the chron exposes one particular area of the economy for which pricing is inherently difficult and results in severe distortions. In fact, the distortions are so great in the U.S. that the entire system has just undergone a very unpopular overhaul… the area is health care.

If you envision a world in which productive effort as measured in time is money, then it is clear that health is probably the single most important factor to an economy. It’s no secret that the staggering costs associated with health care motivated the creation of the Affordable Care Act, more famously (or infamously) known as Obamacare. The hope was that, by subjecting health insurance costs to greater market forces, substantial reductions in those costs would result. However, the chron reveals that the value of life simply can’t be fairly quantified. How do you fairly price health tests or treatment? When it comes to improving health or saving lives, what is fair market value for services? If a doctor saves your life, is there any price that can be paid to even the scales?

The answer would have to be “no.” A physician could realistically lay claim to anything you produce after the fact as a result of having saved your life. In some ancient cultures, saving a life resulted in the person whose life was saved becoming indentured to the person who saved them. Even in chron, a person would have to pay a lifetime’s worth in order to equalize the scales and that would be counter-productive to actually having been saved in the first place. Even in the event that a healthcare worker is not saving a life, what is the value of preventative medicine, physical therapy, or convalescent therapy?

What the chron reveals about health care is that it should be performed as a public service. It validates the concept of single-payer health care. In a chronist system, all healthcare would be provided on a completely not-for-profit basis. This should not preclude the use of xChron for additional compensation to attract doctors or others with valuable skill-sets; it just means that the goal of hospitals and other such entities should be to price their services in such a manner as to only cover expenses and liabilities.

What about veterinary services? Can the life and health of a pet truly be quantified? It’s likely that, for most people, particularly pet owners, the answer is no. For that reason, such services should also be offered on a not-for-profit basis.

Passion > Incentives

The previous section regarding healthcare begs the question: what will keep the world from settling into a cozy stagnation of everyone performing low-skilled work to make a basic yet dignified living in chron? The answer is the same thing that motivates everyone who does something they love for free which ends up positively affecting others. The simple fact is that people like to be productive and contribute. Many are motivated to tackle the challenges of the world not because of the promise of wealth, but simply for the chance to achieve. The need to validate ourselves is part of our inherent psychological profile as a species; humans simply seem to feel better about ourselves when we make useful contributions which benefit ourselves, our families, our communities, and our society.

Our current economic system is likely stifling massive amounts of intellectual and creative power. The chron was conceptualized partly as a way to unleash that power by leveling the psychological and emotional barriers erected by the current economic paradigm. With the relative guarantee that our productive effort will, at minimum, ensure a dignified, relatively secure life, the fear and shame created by the capitalist/fiat currency system will then be channeled collectively into a force that will transform our planet. With the collective energy of our inspirations and passions unfettered, humanity will be prepared to fully achieve its potential and take our place among stars.

The World Beyond Capitalism

In case you hadn’t guessed it, there is a greater purpose to the conceptualization of the chron than just creating a more equitable world. What are the ultimate benefits of a chronist economy and why is such a change essential?

The chron is really a pretty simple concept: it seeks to resolve the contradictions of the current economic system by creating an objective, absolute currency system for true value-for-value exchange. In the end, it obsoletes the grossly imprecise and arbitrary practices of market pricing by encapsulating the value produced in society as a result of effort directly into the currency. The chron represents “time + effort”; time is an objective measure while any productive effort related to that time is valued as intrinsically equal to all other productive effort as its true value is beyond quantification. By creating money from the bottom up, the capacity for a dignified standard of living is possessed by everyone. With the shackles of the stress and shame of struggling for the basic necessities of survival removed, the full weight of human power and innovation can be brought to bear on the challenges we face in ensuring our continued survival as a species.

The chron will herald a new era of “smart” money by personalizing it and, thus, tying it directly to the concept of responsibility. It has the potential to alter perceptions and decision-making in profound ways. For instance, consider political campaign finance… would people accept the spending of billions of chron, their time and effort, for the grossly distorted and negative political theater produced in today’s economy?

Also, would people accept a small cadre controlling massive amounts of realized productive value for their own benefit? Billions of chron would represent tremendous amounts of productive human effort. It stands to reason that people would demand that those chron be used for more than the personal enrichment of another. They would want those chron to solve problems and tackle big challenges because, indeed, the human race has many.

In the end, the chron may be the key to the continued survival of the human race.

The Final Frontier

Conceptually, once a chron is produced, it can never be destroyed. Indeed, the human experience is built on the collected experiences of every event that has ever happened and it has been shown that fate has often turned on the simplest of words or actions. The chron produced by an individual will affect the existence of humanity long after their originator has passed away. Much as the artistic value of a great painting can long outlive the one who painted it, chron will continue to circulate and build our society beyond lifetimes. More importantly, everyone, regardless of their immediate impact on society, has the potential to positively impact history. The less ambitious need feel no guilt as to how they use their lives; as long as they have engaged in productive effort, their time can be reused for great things even after death. In the form of chron, time can be “re-spent” indefinitely. In this fashion, the chron is a form of immortality.

Right about now, some may wonder at the practicality of the inflationary aspect of the chron. If chron are never destroyed, won’t their value essentially become worthless?

The chron, though inflationary, will be subjected to the deflationary pressure of population decline. As Buckminster Fuller so astutely determined, increases in quality of living conditions correlate directly to decreases in birthrate. In other words, the better people live, the fewer children they produce. The chron will facilitate widespread improvements in the standards of life for billions around the world which will subsequently cause the overall world population to significantly drop, placing deflationary pressure on chron production.

Chron production can also be controlled in other ways, such as mandatory ages for entering into the workforce and retirement as well as fewer mandated hours per work week. It’s also likely that, with a high standard of living being far more attainable in a chronist economy, some people will just work less and devote more of their time to leisure pursuits.

Likely, the most effective way of dealing with chron supply will be taxation. The amount of productive effort, both actual and potential, of which society is capable is immense; chron production will likely quickly outpace society’s ability to absorb them. To ensure the proper balance of chron in society, chron can be removed via taxation and “deactivated.” Much as kingdoms of the past used treasuries to store surplus wealth, national treasuries can store chron and release them strategically for a variety of purposes. For instance, there will be many people who, as a result of accident or disease, are not able to do productive work. In these instances, a government provided “social safety net” could easily cover their treatment and/or living expenses. In this fashion, the work of society can be used to support those who are truly less fortunate without negative impact.

A vitally important aspect of the chron is that it is an impeccable store of value because it represents value itself. It stores the value of productive effort just as history does. The chron is inflationary, debt-free money that will always be intrinsically valuable. In the years ahead, that will be tremendously important.

Time is Running Out

Whether we understand it or not, we are in a race against time. At this point in history, the statistical odds of the human race going extinct at some point are 100%. The only way to improve those odds in our favor is to become a space-faring culture. It is imperative for the human race to embark on a scientific and technological endeavor to colonize other worlds. With fiat currency saddled by debt, it is tremendously expensive to fund such a purpose in our current economic system. The forces of the market have barely motivated us to duplicate the space exploration achievements of almost half a century ago. The cost is too high and the pace of development is too slow in our current economic paradigm to ensure we can develop the technology and lifestyle necessary to avoid extinction. Our efforts must be accelerated to give ourselves a fighting chance.

The chron guarantees the funding necessary to meet that challenge. As an inflationary currency, the chron money supply will grow quickly enough to create the surpluses needed to fund the massive-scale projects necessary for extra-planetary colonization. As the chron is also inherently debt-free currency, future generations will not be saddled with the burden of repayment and the subsequent destruction of time/effort value. In other words, the chron allows us to shoulder the financial demands of these endeavors “up front.”

In the world of the chron, technology will still play a vital role. But rather than deprecate work and displace the worker, its role will become clearer as a tool that serves society rather than drives it. It will play a vital role in performing work that is too tedious or dangerous to be performed by humans. It will facilitate the elimination of fossil fuels as our primary energy source thus reversing centuries of ecological damage. The advancements of technology will bring a standard of living to billions of people that they could only have hoped to enjoy in our current economic system. And, ultimately, it will lead us to other worlds; massive new machines will allow us to terraform worlds while nano-machines will augment our immune systems, providing protection against extraterrestrial microbes as humans reach distant planets and expose ourselves to alien ecosystems. While the institutions of capital used technology always with an eye on driving down labor costs and creating new consumers, technology as an industry will finally get the chance to fulfill its purpose as a force for unambiguous, positive change.

Capitalism was once essential, but now we have outgrown it. It’s time to embrace a new economic system that will not enslave our children with debt and shame. It’s time to embrace a new economic system that will unlock the potential of the human species and allow us to save the home we have while enabling us to find new homes among the stars.

Why It Matters

The truth is that the chron is not inflationary, it is expansionary. The chron will initially alter the complexion and psychology of the world by eliminating poverty and empowering people to fulfill their potential. As surpluses are developed, it will be used to incentivize people and groups to develop the technology necessary to spread humanity into outer space. In other words, the abundance of chron will actually motivate the expansion of the human race.

A new class of social elite will develop. They will be vanguard of humanity, the ones who personally assume the challenge of developing and using the technologies that will expand the human race to the universe. They will be engineers, scientists and explorers. They will have grown up in a world without want, one that allows art and culture to flourish because human potential is allowed to grow and breathe. Strong traditions will develop again and, as the psychology of the world changes, families will learn to be closer to one another again.

Everything won’t be roses, though. Beautiful ground is just as fertile a place for weeds as it is for flowers. Bigotry and prejudice may flourish in a world where people have the time to truly contemplate perceived differences. Will the new elite be revered as pioneers or envied for the wealth and status they will accumulate as a result of being the trailblazers for humanity?

It is highly unlikely the chron will solve every problem faced by humanity. However, what it will do is let the genie out of the bottle. We live in a world in which our economic system thrives on the concept of scarcity though technology defeated it not too long ago. Using technology, our planet has more than enough resources to comfortably provide for everyone, everywhere. The sad truth is that we are perpetually fighting a psychological war against poverty. Not just including the rich but especially the rich. We are terrified of want, but we’ve already won the war. Capitalism served its purpose, now it is time to let it go. Our economy is designed for scarcity, yet there are practically infinite resources in the Universe. Our economy should reflect the reality of our existence…  that there is a great, big Universe out there waiting for us to experience it. If we are going to save our species and give our progeny a chance to survive, it is imperative that we end Capitalism and implement a better way.

Not the End, but the Beginning

I wrote this essay because it needed to be written. I think it is apparent that there are fundamental problems in our current economic system and I decided to devote a few brain cells to figuring out how to fix it. Maybe the chron isn’t the answer, but I hope it will get people to really think about the question in fundamentally different ways. We live in perpetual boom and bust cycles. Despite the amazing progress made in the last few centuries, the world is still plagued by crime and misery. Albert Einstein once stated that the definition of insanity was to do the same thing over and over again expecting a different result. It’s time to do something different to change the result.

Capitalism is a fundamentally amoral system. It doesn’t care if harm is done as long as profit is achieved. We’ve created a system of laws to rein in its worst impulses, but many of them still slip through the cracks. Most crimes are simply extensions of Capitalism, the forces of competition involved in creating supply to meet demand. The illicit drug trade is one such stark example. Many other crimes and vices are a result of the psychological distortions created by Capitalism. Frustration and hopelessness created in an economic environment that has no respect for the value of time and life motivates indulgences in a variety of forms. “Sex, drugs, and rock and roll” are a mantra; escapism is not only a way of life, but big business as well. The forces of Capital built up the world and the collateral damage was acceptable because it brought us so far, so fast. But everything has a price. Global warming, pollution, and devastating ecological damage are the results. In a world in which we are all connected, the need to create profit commodifies the most important “capital” of all: Humanity.

I wanted to conceptualize a solution that invests everyone. Industry and commerce should appreciate the chron for removing labor costs from the equation. Libertarians and those on the economic right should appreciate the chron for its self-deterministic qualities that encourage personal responsibility; it offers no free rides, people still have to work to make a living. The chron emphasizes that social safety nets should, at the very least, be voluntary; no government should be able to mandate how someone uses their time and effort. It also has the potential to obsolete some social safety nets by removing the competition between Capital and Labor entirely. Proponents of the left should appreciate how the chron places money creation directly into the hands of the people, finally giving them the power to set their own course. Social conservatives should appreciate the chron because of its potential to severely reduce crime, indulgence, and social excess. Governments should appreciate the chron because it still requires central authorities to manage the validation process. With less economic tension worldwide, governments and militaries will likely shrink. People will then be invested in making sure the people representing them are actually “thought leaders,” people who can truly guide the collective efforts of humanity to greater heights of development and civilization.

I’ve barely scratched the surface of the chron in this essay. There is so much more it can reveal about our society. For instance, the chron presents a natural solution for the death penalty. Rather than execution, a reasonable alternate is that a person can become an indefinite ward of the state. Such persons could be utilized for excessively dangerous work by the state or otherwise have their productive effort utilized. They could never own their own time again.

In this vein, restitution rather than punishment could be an acceptable alternative for economic crimes. For instance, thieves could make financial restitution to their victims in chron through prison work programs. Rather than being incarcerated for specific terms, criminals convicted of economic and financial crimes can work off their debt until it is fully paid. Such a system would likely discourage large-scale theft.

The chron is also a powerful concept in cases of wrongful conviction. In the event such an injustice is committed and the person is exonerated by new evidence, they can then claim their chron back from the state. With the chron, the value of a person’s lifetime efforts are always preserved; even one wrongfully convicted could rebuild their life with the chron created by their work in prison.

A chronist economy also greatly improves the chances for rehabilitation of criminals by reducing recidivism. In a world in which labor pays for itself, many jobs that were once too expensive for capital to assume, particularly those associated to resource reclamation, can be performed by former prisoners or others who may not be able or willing to perform other types of work. Reclamation efforts, such as mass clean-ups or deconstruction of fixed capital, such as old factories or even whole cities, will have a massive, willing pool of labor who will not have to bear a stigma for performing an honest day’s work. In the capitalist system, former prisoners struggle to find their place in a world that is hostile to them even after they’ve paid their debt to society. In a chronist economy, their efforts will be welcomed, giving them the real opportunity to start anew.

Maybe I’m wrong, but I think the chron is an amazing concept with stunning possibilities. I intend to write more about how it can be utilized for a variety of pricing and economic models. Applying the chron to the areas of writing and book publishing is an interesting challenge. I’ve already created a scenario allowing the chron to be applied effectively to blogging and journalism. I hope that others, particularly economists, will find value in this concept and expand on it.

So this is the end … or the beginning. The chron may not catch on right away, but it is more than likely that a cataclysmic event, such as a world-wide economic collapse, will cause everyone to rethink the sense of our current economic system. I wrote this essay for that day. If the chron finds widespread acceptance sooner, that would be great. However, if not, I hope this serves as a place to start if the worst should ever happen.

James King writes on technology, economics, and philosophy. Read more of his work at The Currency Paradox and Rando Calrissian.

Read other articles by James.