By Louis James
Exclusive to The Libertarian Enterprise
I had an interesting discussion the other day, with a bunch of Austrian economists I sometimes hang out with. They were discussing the future of money, and whether digi-cash and other encrypted ex-change media will render income and sales taxes obsolete.
I got to thinking that, no matter how well hidden, transactions backed by Funny Reserve Notes will ultimately be vulnerable to tracking. Besides, if Gummint notices that people are not using their funny money, Gummint might get mad and -- like a jealous and violent spouse -- move in on the competition with force. I urge all not to be naive about this. If Gummint revenue is threatened, Gummint will react violently, with little concern for consequences.
An even scarier thought arises. If Gummint really does go for complete access to electronic transfer information, the amount of information available on any given subject -- I mean, citizen -- is nauseating. Just think of what they can tell about you from your credit card purchases. I try not to think about the massive violation of privacy recently done with AOL's quiescence.
That's the stuff of nightmares.
So how will the entrepreneurial spirit manifest itself as the pressure builds to escape Gummint's monopoly on "legal" tender?
"Maybe," I suggested to my economist friends, "people will simply abandon the idea of money all together."
"Are you crazy!?!"
"You are crazy!"
"Well, think about it guys; if there isn't any money, Gummint can't debase it! People can go back to real free trade: barter."
I made my argument as follows...
The reason money was invented (we suppose, no witnesses come forward to verify the speculation) is because barter is inefficient. If a shoemaker wants milk, but the dairy farmer doesn't need any shoes, the shoemaker is simply out of luck. No trade. So, we speculate, people like our unfortunate shoemaker became willing to trade for intermediate goods (things they really didn't need, but knew that other people would want with frequency). Eventually, money evolved.
But conditions have changed. Specifically, the cost of certain kinds of information is diving toward zero. As the "information age" progresses, there is no reason to suppose the shoemaker's problem won't disappear entirely. Suppose our shoemaker wants, as he did 4,000 years ago, some milk. Instead of going to the one dairy farmer to see if she needs shoes, he gets on BarterNet, offers his shoes in exchange for milk. He gets five offers from local suppliers. UPS (whose prices have been driven down by the surge in volume, and whose deliveries have increased in frequency for the same reason) has the exchange completed the same day, if not the same morning.
Well, maybe it wouldn't go exactly like that, but it does not seem impossible to me that something like that could evolve. In fact, it seems downright inevitable. The internet, and its successors, may be the ultimate answer to the shoemaker's dilemma.
The question then becomes, how far will the use of money retreat? I don't really see it vanishing entirely. A widely desired trade good (like a gold coin) could come in very handy to a large company dispersing its payroll, International (interstellar?) trade ventures, and trade ventures with speculative outcomes. I'm sure minds more creative than my own can add indefinitely to this list.
Whether the economy ends up with 75% barter transactions and 25% money transactions (check, credit cards, and the like all count as money), or the other way around, doesn't really matter. What matters is that as existing forms of money are increasingly debased, people are likely to turn to other ways of transacting business. A wise observer may profit from knowing this.
What's even better, for the short term, is that barter exchanges are not currently taxed in any way (that I know of). I think Gummint doesn't want to tangle with the accounting nightmare that regulating barter would entail, assumes a zero sum gain, and leaves it at that.
Savvy people could shift a portion of their economic activity to a barter basis, and reduce their tax burden. Today.
Savvy computer people could write a virtual agora that could enable an accelerated shift to barter, and profit from it. Today. (Well, almost!)
According to Charles J. Champion, Jr., president of Tradenet Transaction Systems, Inc., "In the United States last year, organized barter systems accounted for over $7 billion in barter transactions." Mr. Champion says that there are several organized bartering systems within the U.S. and overseas. Most of these seem to focus on alternative exchange media (BXI Dollars, Tradenet Dollars, and the like), but there is nothing in the technology which prevents us from bypassing media and going straight to interpersonal transactions of goods or services for goods or services.
Heck, if they stopped taking money for it, prostitutes might even be able to ply their trade legally.
Libertarians might be the first people to join a bartering agora, but, others would be sure to follow. As agoric traders' wealth increases without their tax burdens increasing, the idea is sure to catch on.
There is an opportunity here. An opportunity for liberty and an opportunity for personal wealth.
Louis James is a father, a Libertarian, and an advocate for self-government. He reads, he writes, and he has the good fortune to earn his living by helping to spread the idea of liberty.
PERSONAL TO MARK RUSSELL: Mr. Russell, I remember Tom Lehrer. I've played and sung Tom Lehrer's words and music. Disagreeing with his every political position, I've admired Tom Lehrer's unswerving dedication to his principles. Mr. Russell: you are no Tom Lehrer.
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