Bryden Allen's Website

Finance and Remuneration


If our communities are to thrive, then they must have sane, simple monetary systems, which everyone can understand and accept as being fair to all people. But it will require a significant amount of time to design and describe such a system. Finance and remuneration is a big subject.

 

In our case, I think our financial unit ought to be a "normal hour's work", because we all understand precisely what this means. And, furthermore, all people will be paid at this same rate - including all our officers (for the reasons I gave in my previous webpage).

           But, of course, most people are much more familiar with "dollar" quantities and what they mean in practise. So I need to show how these two different financial units will roughly correspond:

           -  an "hour's work" will be roughly equivalent to $25.

           -  A man-year's work will be regarded as 1600 hours (i.e. a person working 46 weeks per year, for 35 hours per week).

           - So then: a man-year's work will be equivalent to $40,000.

           These values may only correspond to the financial situation of 10 years ago, when I was more familiar with these values. The great advantage of the "normal hour's work" measure is that this value does not change much over time and between nations. So it cannot inflate.

           If you look at my big financial diagram down below, then you will see I have used "dollars" values rather than "hour's worked". This is because I thought most people would comprehend these "average values" better. But these values all, in fact, correspond to 3, 2 or 1 "man-years". So they actually have definite meaning in terms of "normal work hour". For brevity I will now call our financial unit a "cit-hour" (cit stands for citizen).

 

I now need to show how our financial system will run. Each community will effectively run its own bank. This work will be mostly done by the financial officer, but they might need help in inputing all the essential data. And, like all financial systems, there must be a large amount of input to the total system. There must be 4 different types of transactions that must be put into the system. These are:

 

           Time-sheets

During the week, all members will fill out their work-time in time-sheets and their various officers must check and sign these time-sheets as well. During the weekend, all these time-sheets must be presented to the financial officer. The officer will input all this data on Monday. Some people might cheat a little and overstate their hours - and their officers could be careless about checking. So these time-sheets must be saved in a public region so that all members can check that these time-sheets do represent the truth of what actually happened as regards work. (Most people are less likely to cheat, if they know their friends can see what they wrote down.)

 

           Expenses

During a week, all members must pay for all the goods they have received and used. The easiest way of doing this is to provide all members with their own tiny home-made check-books - like the little yellow reminder notices we use so often. So all members can give tiny checks for all the items they receive in terms of cit-hours. But a cit-hour must now we divided into cit-cents to give a more accurate value for small items, which the members have received.

           Now the value of all these goods must be in terms of cit-hours and this calculation may not be very easy. Each officer, in charge of an activity, must make sure that, over a year, the expenses of their department in terms of the cit-hours, which they give to their workers, is equal to the income they receive from all members for providing their various products. So the officer in charge of the agricultural dept must check that:

           - the number of cit-hours they give to their workers for growing and picking their food

           is equal to

           - the number of cit-hours they receive for their produce from all their members over the year.

This officer will need some experience in agriculture to be able to do this pricing of their produce in cit-hours correctly.

 

           Capital Debits and Credits

Besides all these normal daily transactions, the large initial costs of the community's infrastructure must also be payed for. To do this, a community must first decide on a fair "interest rate". Over all centuries, when inflation has been taken out and there is no risk (because the community is committed to using these facilities), the general interest rate has ranged been between 3% and 4%. I think either 3% or 4% could be used by our communities. The crucial item is that the community should choose a rate in this range and then stick to it. In this way everything is completely fair for all generations. And all members will know precisely what their future payments will be - and the interest they will receive for their own equity in their community's infrastructure.

           In practical terms, it is probably best to also include these interest adjustments weekly a well. So all members will receive interest on the their equity in their community regularly. The payment for these infrastructure items, will mostly come in terms in payments for facilities received (as it does in the current world). So the cost of food would include the interest on the land when it was bought and its development costs. Similarly the cost of energy would include the cost of buying the PV panels initially.

           So our community must still follow the normal sensible transactions practises that all modern societies have to carry out as regards the cost of capital items.

 

           Outside Dollars - Required or Entered

All my green socities are designed so that all members can go out into the current world outside and enjoy its facilities and often work there as well. So some members, going out into the outside world might like to exchange some of their cit-hours for Australian dollars. Other members, who are working in the outside world, might like to return to their community. And such people returning might like exchange some of their Australian dollars for the cit-hours, which they will use in the community.

           The Finance Officer will look after these necessary exchanges. So this officer will weekly give an exchange rate and all members traveling outside can change their cit-hours to Australian dollars (and vice-versa) as they like. So all members must see there Finance officer quite often.

           When there are many communities there must be different rates between the various communities' cit-hours. So, if a community allows its workers to gain cit-hours too easily, then the value of the community's cit-hour must fall. We must follow the demands of supply and demand as normal.

 

Clearly the Finance officer will have a large amount of important work to do. In the current world this work is done by a huge banking industry, which makes a huge amount of money. This industry makes this money by charging higher rates of interests to lenders than it pays to its investors. In this community bank, I use the same rate for both borrowers and lenders. (And even the Finance officer is paid at the same rate as everyone else.) I think this is a fairer system. My hope is that our community members will no longer worry about money too much at all. Instead people will be spending their time thinking about they want to do in the abundant free time. (I am not actually knocking our capitalistic system and its worship of money too much. If this is what people like and I am happy that they should have it. All I want to do is to show that a small number of sane people could live in a very different manner.)

 

In the current world, finance is regarded to be a private matter and so people do not know other people's bank balances. This would definitly not be the case in the communities I am proposing. Everyone would study everyone's bank-balances and see how they compared with their own. It is enormously import that everyone in our communities should progress to financial independence and be able to look after their old-age expenses.

           So, in this society, if a member was using addictive drugs too much, then this problem would probably be reflected in this person's bank-balance. And furthermore, a study of the public transanction files would probably indicate the name of the person who was providing these drugs to this person. So this problem could easily be seen and dealt with quickly. The open nature of our financtial system should help to keep all members healthy and independent.

 

 

Below I show a diagram, which demonstrates how the financial state of all members (i.e. their equity), should vary over a person's life.

Let us start with Tomi, who is 25 years old. You can see that she is roughly half-way to having about the average amount of equity that people expect to have over their life (in all three levels government). So this is fine. She will be able to look after herself quite well in her old age.

           Dick on the otherhand is probably at the prime of his working life. So he now has all the equity that he is allowed to own ($300,000 or 7.5 man-years). So he can't work for money now at all (he could in a few months time when his daily expenses have reduced his equity a little). So he now spends all his spare free-time: enjoying himself climbing or helping his fellow men create new communities where people can live with lots of free-time - like he has. But he could also go overseas for while and so broaden his horizons if he likes.

           Harriet instead has now mostly retired (she is 75). But she can easily do some work, if she wants to. She still has plenty of equity to look after her old-age if she wants to use it. She could also buy an annuity package to look after old-age as well if she wants that instead.

 


In the village and town centres, the payment for services would now be done more easily by using Citizenship Identity Cards. Thus a person, when entering a town-car, would insert their identity card in the car's computer reader. And this person will retrieve their card when they leave at their destination station. And these cards would be used in a similar manner, when receiving all other services like food and drink. To be fair to all people, this information must be completely public and so all people could see everything on their own personal computers. In communities that given equal opportunities to all people, all people must be able to see all the raw data if they want to. Communities must have lots of officers to make important decisions. But this doesn't mean that members can completely trust them.
            And the times associated with the use of these cards could also be used to check the times, which people claim in their time-sheets. This system of card usage could also be easily extended to have card readers on the entry and exits of all the buildings in the village and town centres. And then the system could be used on all the gates, which lead to the various hamlet regions. I am not suggesting we actually do this. But we could do this very easily if there is a problem. Then it would very hard for anyone to cheat on the claims, which they might make in their time-sheets.


Thus this financial system would force all people to look after their own personal financial situation in a sane and sensible manner. Like all good systems it would also be utterly boring. There would be no rich people at all and very few poor people as well. But, instead of worrying about money, we can now think about expanding and showing the world how we ought to be living in a green manner.
            And, if we want to, we can ensure that almost no one can cheat in this financial system at all.

 

 

My next normal webpage is: "Citizenship Levels".

 

          You might now also like to look back at:

either my "Home Page" (which introduces this whole website and lists all my webpages),

or "Green Living" (which introduces this major set of webpages),

or "Forming Green Communities", (which introduces this set of webpages).

 

Updated on 11/11/2016.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

You can click on any of the following pictures and this will send you to the relevant webpage.