Never been one to let the carrier drop

Bucketized currency is a different way of thinking about money.

It’s not something you can do until you have good computers and good networks.

The idea is instead of tracking value via a price tag in fiat money, you track the individual resources that go into everything we buy, using buckets. This is probably not something the end consumer ever has to know about, but it is something that should be used at the corporate and government level to determine what we can afford and what offers the best ROI.

A example is health care. To determine if we can afford universal health care, asking about dollars tells you next to nothing. What you need to know is how many doctor-hours, nurse-hours, technician-hours, lab-hours, how much copper and aluminum and sand going into the machines we use for health care, etc we have.

You break up the cost of the product (say, a computer) into buckets of resources needed to build that product. Example, a computer probably needs a fair amount of copper and gold and silicon and boron and phosphorus, lesser amounts of some rare earth metals for the battery and the display, and a bunch of robot-hours to fab the chips and boards and a few man-hours for final assembly.

One of my criticisms of the current economic system is that the price tag and the value of the resource are only tangentially related. When people talk about what we as a society can afford, they are trying to use dollars to make these decisions, and dollars are hopeless at it because they discard significant amounts of information. Therefore, we make bad decisions because instead of us using the tool, the tool is using us.

This entry was posted on Sunday, January 3rd, 2016 at 1:02 pm and is filed under Resource Allocation Systems. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.