A new economic system designed to fix everything, to take back our world and put power in the hands of the people.
We'll fund (and in some cases, organize) solutions to all the world's problems, big and small. We do this by making a 2-part website, one part a market, one part voting.
- Part 1: The Market: We make an ebay-like market that uses
economic algorithms and an on-site currency to get rid of overall inflation and deflation of currency in a way that makes profit in the process. This will let buying and selling happen without fees. No worrying about how much you can buy or sell, or having a percentage of loss. You get to keep all your profit, and five years down the road, that profit will still be worth just as much as before.
- Part 2: Voting: The site is run by direct democracy. After upkeep is covered, everyone has a vote on how remaining funds are used and how the site is managed. A portion of the profits will be shared with everyone and a portion will support causes that people vote for. We're not going to hand-pick causes. You get to add causes and vote for them.
Why you rush to fund this project right now and tell everyone you know about it:
case you still have questions after the video, the goal of this
Kickstarter is to literally fix all of the problems in the world. A new
economic system may sound like a boring project, but this project isn't
designed to be flashy, it's designed to be effective. Like the legend of
Paris's arrow, the attack against the demigod Achilles wasn't won by
overwhelming power, but by careful study, planning, constructing a
well-thought through device, and then having careful execution. Like
that well trained and well
aimed arrow, our project will strike the world's problems.
What the project is about:
Dramatic (yet honest) Version:
At this moment, people are starving. At this moment, people are dying in the hospital unable to afford their medical treatments. The planet is being destroyed one ecosystem at a time. At this moment wars are raging. At this moment powerful people are robbing others of basic human dignity step by step. And We. Will. Stop It. The research has been done and the numbers have been run. We can fix the world's problems with one solution that will resound through all of humanity, an invigorating and empowering force like never before that will allow people to rise up against their problems and take them head on.
Calm (and more technical) version:
project is about helping people through economic crisis and social
action, doing so in a way that lets people tackle all problems forever.
We'll be creating a web-based economy based off of the Heritage Check System in science fiction author Robert Heinlein's book "For Us, The Living". The system was originally meant to be the idea that a government could have an alternative to taxation, that stabilizes money away from inflation and deflation, boosting the economy through its very existence, and literally funding itself by giving money to EVERYONE! The system is a economic/mathematical work of art, and the math predicts it will be significantly more stable than our current system could ever be.
You may ask why this system isn't in use today. The answer is simple: It doesn't provide any benefit to those with the power to implement the system on a government-wide scale. It fixes so many of societies problems that most politicians would lose most of the platforms they run under. Corporations don't want to spread the word because the system greatly favors small businesses over large ones. The system favors people who work hard over those who manipulate stocks.Also, due to its nature, people would begin to expect higher wages. Further, for the most part, the common man just doesn't know about it especially since it can be complicated to understand. If you want to read up on it yourself, just read Robert Heinlein's "For Us, The Living". (The link points to the Wikipedia page, specifically to the entry that talks about the Heritage Check system. For the book, I suggest your local library, bookstore, or buy it online.)
However, I should point out our system is simply based on Heinlein's Heritage check system. There are a few key differences that shouldn't hurt it's abilities at all. In short, in the book, the system was mandatory and run by the government as part of our current state-representative system. As a website, we believe we can do better, creating an optional system run by a web-based digital democracy that spreads worldwide. This means even more freedom for the people than Heinlein hoped it would give them.
As far as the end user, what you'll see is this: A website that you can log into; buy and sell in an ebay-like fashion with site credit, where you can buy/sell on-site site credit with/for actual dollars (or yen, or euros, etc.); and regularly get credit added to your account for free.
In addition, there will be a part of the site where you can vote, both on how the site is run, and suggest or vote on various ideas that you think the community as a whole should fund or support. Support topics could be anything from cleaning up the environment, supporting rights movements, getting humanity to settle other worlds, providing protection for persecuted groups in third world countries, or whatever the people's collective hearts desires.
Who will have access, and when:
Both the Market and Voting will be available on site launch. However, the part of the market that involves currency exchange may be limited based on region. We'll be dealing with the legal details in this order: Washington State, Oregon, U.S., Canada, followed by full international support, focusing first on countries with the most users.
How we'll use the funds:
and foremost, the funds will be used to help us put together the site
that will actually run the system. After that, we focus on the
stabilization and expansion of the system. That means taking care of the
legal aspects, obtaining a physical location for dedicated servers,
getting the word out, and buying supplies to improve what we offer. For
example, one idea we like is making it so you can swipe a card, like a
credit or debit card. The idea is that when you swiped, you could
automatically buy dollars with your site credit, and transfer them, as
well as receive funds in a similar way.
If you've been reading (and not following links then rushing to buy the book), you may ask...
Wait... So, I get free site credits from my profile... and I can trade it for money... so I will get free money for the rest of my life!?!
Yes you can.
Are you giving these credits to us as a reward for backing your project?
No. The goal of this project is just to create a new way for people to take control of their own destiny. A market and voting system that is yours. The credits you get will be algorithmically given to everyone as a result of the actions of the community as a whole.
But how can you do that? Is it a pyramid scheme? Are you pulling it from us in fees? Is it legitimate? Won't you go broke? Is it legal?
we can do it, it's not a pyramid scheme, there are no fees, and it IS
legit. It won't cause the site to go broke (in fact, it'll fund it!) and
yes, it's legal. As for how we do it, check this link to the Wikipedia page of, "For Us, The Living". It does a fair job, it tells the steps, but not necessarily the complicated overarching "how" of why it works.
We will try to do that here, but be warned. It is not short...
Here's a thought experiment to explain it for you. In our society, if it wasn't for banks, the economy would work as follows:
Imagine there are only three people, and one dollar in existence, and its yours. You have one friend. He makes a TV. Since your dollar is the only money, he's willing to sell you the TV for one dollar. So a TV costs one dollar. You give him the dollar, and you get a TV. Now, along comes along a second friend who made a toaster. Your first friend wants it, and trades him the dollar for the toaster. So 1 dollar = 1 TV = 1 toaster, right? Not so fast! Now, your friend, with the 1 dollar, decides he got a bum deal, and he wants a toaster or a TV.
Both you and your friend are willing to sell yours, both deciding you want the dollar but now there's a TV AND a Toaster to buy at once, but still only one dollar. You both want money, so you drop the price. You are each are willing to sell your TV or Toaster for half a dollar. He buys them off of you. Later you want the TV back, but you only have half a dollar... but guess what, that's still the going price for a TV! So you buy the TV for half a Dollar. It is effectively the same deal as before, but you only spent (and only had) half a dollar instead of a dollar. So whoever doesn't have the money now just got cheated because the value of their items went down, and whoever hoarded their money is better off. So what changed the price?
Someone made a toaster and introduced it to the economy. Every time someone does work, and sells that work for money, they've added the product of their work to the economy. That makes the value of money go up, and the value of products go down. That is the source of what's called deflation, which is the opposite of inflation. In fact, any system without outside factors affecting the money supply will deflate naturally. Any perishable good simply makes money shuffle hands since it doesn't affect the number of goods long term, or the number of dollars. However, any non-perishable good permanently deflates the system, making money worth more.
So why do we have problems with inflation? You remember when I mentioned, "Any system without outside factors affecting the money supply will naturally deflate"? The U.S. government has that. It is called "Fractional Reserve Lending" and "The Federal Reserve". The federal reserve is always adding more dollars to the economy. And banks "print" more money by making loans with dollars they don't physically have in the buildings.
In fact, so much money is printed by the Federal
Reserve and added through fractional reserve banking that it makes our
money able to buy less every day. Let's see an example again:
You have a dollar. Your friend made a TV. And you have a third friend who makes dollars. You buy the TV. Your TV friend then makes a toaster. Your dollar friend loans you a dollar so you can buy the toaster, under the promise you pay him back two dollars later. He makes a dollar and hands it to you. You then hand it to your TV friend and have a toaster and a TV. You have no money, and have to pay back the debt. You sell your TV and Toaster to a third friend, who your dollar friend loaned two dollars to. Now one friend has two dollars, you give your two dollars to your money friend (who can print money, but doesn't destroy money), and your third friend has a TV and a toaster. Your money friend and your first friend now both each "legitimately" have two dollars. Your Friend with the TV and Toaster needs to pay back his debt, so he sells the toaster to your first friend for two dollars, and the other to the dollar-making friend for his two dollars. Now the final toll is this... you have two people with nothing (no dollars, no toasters, no TVs), your TV friend who sold his TV and now has a Toaster, and your money-making friend who now effectively got a TV for free. Oh, and by the way, TVs and Toasters are now both worth two dollars each, unlike our previous system where by the end they were worth half a dollar each.
That's the way our current system works. We should be seeing deflation, but are getting inflation because banks, "get free toasters".
Now, both of these systems aren't exactly fair. In the first one, the power consolidates with whoever has the rare dollar. If you make something, the price of everything goes down, and the only one who benefits is the person with the dollar, because he can get more. In the second system, only the bank benefits when something new is made, because the guy who makes something first ends up with a net zero, and the bank gets all the new spending power created (the stock market pretty much works the same way, just in a more complicated and convoluted way).
But now, we introduce the system we will be using. We have an automatic system that makes money, but can ONLY make money equal to what's created, and it HAS to split evenly among everyone...
So you have a friend and he
makes a TV. You have a dollar. You buy the TV. Now he makes a toaster.
Your money-making friend then makes a dollar. After you trade TV for
toaster, the system realizes 1 TV = 1 Toaster. So it gives you both half
a dollar. You think about buying the TV back, but only have half a
dollar. At this point, two more friends show up, and one makes a bike,
and one makes a radio. These were both decided to also be a dollar each.
Since they both showed up and made something new, you get a quarter
dollar for each (and everyone else gets a quarter dollar for each as
well.) This gives you a dollar total again, and you still have your TV.
You buy the toaster, and now your friend who built two things (the TV
and the toaster) has three dollars (one from past increases combined,
and two from what you bought). He buys a bike and radio. Now You have a
TV and toaster, your friend has a bike and a radio and a dollar, and
both your bike and radio friend each have a dollar and a half (enough to
buy something equivalent to what they sold, and a little extra). A
dollar is still worth the exact same amount, and everyone got a little
bit extra by the end, and nobody ending up unfairly losing out, but
nobody came out unfairly ahead either.
(If you're wondering how government/system spending figures into that, it just counts as something that everyone bought together.)
That fair system is what we're creating. By using an on-site credit system, we shield it from the outside world's fluctuations in money caused by the banks (as they'll be disallowed as long as they continue fractional reserve lending) and deflation (since we create credit equal to what's made)
THAT is how money can be given away for free.
So... if the system is built so the value of money always matches the economy... why spread the overall increase with everyone? Why not just those who produce?
This is actually a common question with a multiple simple answers. And the thing is, there will be a way we also reward those who produce in other ways.
First: It's almost impossible to do fairly. From the system viewpoint, it's hard to tell if someone's reselling. For example, is person A selling a toaster they built from scratch, or are they selling a toaster that they bought from person B, in which case person B should get it?
Second: There's no incentive to sell the toaster if you get the money just by making it, in that case we're effectively just rewarding you a pointless medal for knowing how to make a toaster and keeping it. Giving the money directly to the maker does nothing to actually move the economy.
example to the previous question with the bank? The system effectively
starts acting more like a bank if we do that by controlling money flow to producers. Although not
identical, it causes similar to the problems made by bank lending that
eventually consolidates the money. And we do NOT want the power
consolidated in the system. It should facilitate the economy, not
mandate it. An economic system with consolidating money is a dying
Fourth: Simplicity. It's much easier to monitor the change of value of the money itself rather than each individual transaction to see how much the money needs to be put in its system. Its easier to just divide it among everyone rather than selecting for individuals.
Fifth: Spreading it out causes the most economic bang for your buck. The strength of an economy is built by the number of people buying and selling (not how much they're buying and selling, but how many are buying and selling.) Every time something is bought or sold it acts as the mathematical equivalent of a "heartbeat" for an economy. In short, an economy with no trading is dead, no matter how much wealth any particular individuals have. By spreading it out among the largest percentage of population possible, we ensure the largest number of "heartbeats" is achieved.
Sixth: We have a plan to support producers anyway. We won't be able to do this right away, but it is part of the long-term plan... a monetary system becomes more trusted when it has backing, and this can further stabilize the economy. For example, American dollars were more trusted internationally when they were backed by gold, for example. The downside of backing with precious metals, however, is that precious metals are limited commodity and thus limit the currency as the economy expands more than the supply of precious material. The site credits, however, will become a goods-backed commodity as part of its upkeep. Instead of limiting it to a single material, the system will buy from willing producers items of non-perishable single-quantity. This is an item where one is developed and one is sold, unlike books where one is made and countless copies sold. These will be bought at-cost-of-production (both parts and time) from creators. Although that doesn't bring them profit, it does save them from the drawbacks of over-producing, allowing investments at lower risk. In turn, it will provide backing for the site credits, as the goods may either be used by the system whenever needed, or may be resold through the system's stores at a later date. This ensures that the credits will always be worth something, and can be used to prevent instances that may cause inflation. Credits spent on stuff sold by the system's store will disappear instead of going to someone, because the person who produced the goods already got value for it. In a way, it's a delayed sale to provide a buffer for the economy.
But isn't that giving free money to people doing nothing? Won't that hurt the economy, and people in general?
won't hurt the economy or people. Heinlein actually addresses this
issue in "For Us, the Living." He points out that some older traditional
values hold that money shouldn't be had by those who didn't earn it.
However, many of these sets of values actually started circulating in
eras that of Kings, Queens, and Leaders who spread encouraged "morals"
among their subjects when peasants demanded more for their leadership
but that these "values" were especially hypocritical when some of those
leaders would literally spend all of their time just doing whatever they
wanted without any actual work, and pulling in massive wealth from
their kingdoms. Further, there is a circumstance in which most people
are fine with getting something for nothing... and that's inheritance.
The concept of inheritance is those who worked before you pass that
inheritance onto those who would carry on after them. However, the
normal inheritance is very simplistic, just passing from parent to
child. When you look at it, the entire economy of the whole world was
built by all of our ancestors and predecessors working together. From
the hunter, to the factory worker, to the gold rush tycoon, all of us
have ancestors that have added to the world community. In that same
sense, all of us deserve a degree of inheritance for that. We have just
as much ancestry contributing to society as the next person. In a
greater scope, this is where the free money of the system comes from,
the strength of an economy, the interest of an economy, that we all
build together. It is our inheritance, and it is our heritage. This is
why Heinlein called the system a "Heritage check system".
As for if it will hurt the economy, remember from the previous question: purchases serve as a heartbeat for the economy. This is true regardless of their origin. So those who do no work and just use their heritage money are STILL contributing to the economy, just by providing that heartbeat. Also, it should be pointed out that those who only wait for heritage money to come in will be sitting at literally the minimum amount of income for anyone in the system. Economically and socially, that is rock bottom, for the system. Most people want more out of life than to merely survive at the worst possible level, even if the lowest possible level is even moderately comfortable. Due to the strength of the economy, anyone who produces anything is going to become noticeably more well off.
So I can do whatever I want with my 'free' money on this system?
Almost, yes. You will need to stay within the laws for whatever country you're in, and any communal rules set by the direct democracy that will be implemented on the site. There are only three major exceptions that will have a zero-tolerance policy:
1. You will not be able to do fractional reserve lending. Due to the nature of the system, it's can't be tolerated under any circumstance. If you don't know what fractional reserve lending is, chances are, you're not going to do it.
You won't be able to just let it sit forever. Can you save? Yes. But
idle accounts just end up siphoning off money that would otherwise be
split among people who are actually participating in the economy.
Basically, if we see an account with absolutely no activity for a time
period, somewhere between a few months to a few years, we'll send out
warning emails. After plenty of warning has been sent, we'll close the
account permanently, and return the funds back to the community.
3. Multiple accounts. This isn't like Facebook where the worst that happens from multiple accounts is you get to post on two timelines. They can be a little draconian about multiple accounts, but we'll be even harsher. Because extra accounts for one person is unfair to voting and unfair to evenly sharing the heritage credit. If you lose your account information, we'll do our best to make sure you can recover no matter what. But no multiple full accounts. We're going to be strict on that, and will have multiple ways to verify account & identity. We'll try to make it so it's not a hassle though.
Can I have a handy-dandy graph explaining the difference between this system and what I'm used to?
Sure! (Hint, if you can't see it on your computer, you might want to right-click on it and "view image" or your browser's equivilent.)
This isn't the first time that those working on this project
have attempted a new type of marketplace to fix the world. The first one
was a project called the Federation of Humanity. Although successfully
created to release state, it's model of functioning was different and
reflecting our previous lack of knowledge of running such a project. The
idea of the previous site was effectively a site that ran under a model
where people volunteered for non-profits, and got time credits that
could be traded with others for other, more personal, help projects
(such as help babysitting kids). Although a heartfelt attempt at making
the world better, this project relied on Non-profits to be the epicenter
of the project. Many of these were unwilling to risk their limited
funds and volunteer systems to an untested system. Further, it would
have to get a significant amount of support to really function as
From this, we studied economy in higher detail, marketing, and learned what from the mistakes we previously made. The first mistake was relying on organizations that are, understandably, skittish with their resources. Second, was building a system that required a critical mass to function, and that relied not on individuals, but on large groups. Also, it would require constant donations of people's time to keep functioning... in short, it was a constantly down-spiraling system.
This system addresses all those issues and then some. Even if there were only a couple people using the system, it would be able to continue, and with the positive feedback of the community sharing, has the potential to be self-perpetuating and a constantly growing system. We will also do a bit better job advertising this time around. This is why we're going crowd-funding instead of paying for all the work out of pocket and sweat equity as we did last time. By crowd-funding, we build awareness while the system is being constructed. For the first version, we'll be using our old federationofhumanity.com domain. With more social build up, more self-perpetuation built into the system, more economic savvy built in, and a better starting plan, we hope to make a system that can really and truly address the world's problems.
If you really want to see what the old federationofhumanity.com code looked like, it is available here: https://sourceforge.net/projects/federation/?source=directory
Whether or not we reach our goal, we plan to continue to make the new site. However, success will be a much more distant hope if we don't. So, we ask, you help us in our dreams of making a better world.